Manipal Payment and Identity Solutions Ltd Management Discussions

OVERVIEW

For information in relation to our business, see "Our Business" on page 261.

SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS AND FINANCIAL CONDITION

The following is a discussion of certain factors that have had, and we expect will continue to have, a significant effect on our financial condition and results of operations.

Demandfor Payment Cards in India and Globally

Demand for payment cards that we manufacture is also dependent on customer behavior towards payment technologies. In 2020, the total market for payment cards in India, which includes credit cards, debit cards, and prepaid payment instruments, was valued at Rs. 9,071 million. By 2025, this market had expanded to Rs. 28,499 million, and it is projected to reach Rs. 60,542 million by 2030, growing at a CAGR of 20.7% during Fiscals 2025 to 2030. This market size highlights the potential for card

manufacturers in India. (Source: F&S Report) We were among the largest manufacturers of payment cards, both globally and in India in Fiscal 2026. (Source: F&S Report). As such, we are well positioned to capitalize on the growth in the sector. The global metal cards market is expected to grow from 23.0 million units in 2020 and 49.0 million units in 2024 to 113.0 million units in 2030 at a CAGR of 15.3% (2026 - 2030). As of March 31, 2026, we were uniquely placed as one of the select few companies to have issued metal cards in India and one of the leading metal card manufacturers in India holding a patent for metal cards manufacturing. (Source: F&S Report) We generated a revenue of Rs. 829.41 million, Rs. 432.38 million and Rs. 159.91 million in Fiscals 2026, 2025 and 2024 from metal cards. We intend to increase our metal cards production, and expect to derive higher profit margins from these cards, in spite of their higher manufacturing costs.

Among our offerings, debit cards face competition from newer payment technologies like digital wallets, cryptocurrencies, and peer-to-peer payment apps. The payments market is dynamic, with rapid changes in consumer preferences. Debit card issuers need to continuously innovate and adapt to these changes, such as the increasing preference for contactless and mobile payments, to remain relevant and competitive. For credit cards as well, there has been a significant shift in consumer preferences from points-based rewards to cashback incentives and credit cards are increasingly integrated into mobile payment platforms, reflecting a broader trend towards digital payments. (Source: F&S Report) The Indian metal cards market is expected to grow to Rs. 20,983 million in Fiscal 2030, growing at a CAGR of 47.6% between Fiscals 2026 to 2030. (Source: F&S Report) As the metal cards market globally is expected to grow at a CAGR of 15% from 2025 until 2030, it represents a golden opportunity for manufacturers, as the production of metal cards, while more complex and costly than traditional plastic cards, commands higher prices and larger profit margins. (Source: F&S Report) As a domestic manufacturer of these cards, we have a competitive advantage over global producers in terms of turnaround time and logistics costs and higher preference for supply of cards to PSBs due to Make in India initiatives. We intend to focus on enhancing our metal cards competencies by adding more variants of metal cards to the market, thereby reducing import dependence. The demand for our products is likely to be impacted by the evolution in end-consumer preferences, and our ability to respond to such changes.

Technological Advancements and Innovation

Our sales volumes are impacted by changing technological trends in our industry. For instance, we played a role in the transition of technology for payment cards from magstripe cards to contact cards, or chip embedded and further to DI cards (chip embedded, coupled with tap and pay. The upgrade by our customers from magnetic stripe to chip-embedded cards and further to DI cards resulted in significant changes to our financial profile including an increase in revenue per card we earn, since chip- embedded cards and DI cards have a higher selling price compared with magnetic stripe cards. The conversion from magnetic stripe to chip-embedded and DI cards resulted in an increase in our cost of goods sold as more advanced cards involve an integrated circuit chip assembly and may also include an RFID inlay assembly. Our results of operations in the past have been affected by our ability to incorporate new technology in our products at price that is acceptable to our customers.

Similarly, we commenced manufacturing metal cards in Fiscal 2024, which are premium products offered to affluent and aspirational customers by banks and fintechs, with a few start-ups solely offering metal cards to their customers. (Source: F&S Report) We have also expanded our offerings to include payment-enabled wearables such as watches, silicon bands, keyrings, ceramic rings, and NFC-enabled QR stickers, which facilitate contactless payments through embedded chip and antenna technology. Our chip embedding services for smart wearable manufacturers further illustrate our adaptability to evolving form factors. We have introduced recycled PVC cards as part of our sustainability initiatives, offering an environmentally friendly alternative to traditional plastic cards. Additionally, we have developed integrated cards for campus services, enabling students to pay for printing, vending products, public transport linking university locations, and at designated restaurants, all through a single card.

Further, we have progressively offered innovative products, such as image cards, LED cards and cards utilizing sophisticated technology that requires additional time and effort in manufacturing. We generate higher margins from the sale of such cards owing to our value-added services. We also offer personalization services through our centralized bureaus and instant issuance solutions, allowing banks to issue personalized payment cards instantly at branch locations. Our future results of operations will depend on our ability to adapt to evolving technology with regard to payment card offerings, as well as create a product mix that enables us to optimize our profit margins.

Raw Material Costs, Operating Costs and Operational Efficiencies

Our business, financial condition, results of operations and prospects are impacted by prices of raw materials purchased by us such as semiconductor chips/ banking chip modules, plastic overlay, PVC sheets, UV inks and varnishes, holograms from certified vendors of payment schemes and metal and alloy plates, inlay/antenna sheets. For cheque printing, our key raw materials include CTS water-marked MICR paper, security inks, offset printing plates, adhesives, pinning coil, packing materials, plastic envelopes and other process consumables. Set forth below are our cost of materials consumed for the years indicated:

Raw material pricing can be volatile due to a number of factors beyond our control, including global demand and supply, general economic and political conditions, transportation and labour costs, labour unrest, natural disasters, competition, import duties, power tariffs and currency exchange rates. Some of our raw materials, such as semiconductors, are available from limited sources and are therefore, more susceptible to supply chain disruptions and price volatility. Our contracts with our customers may not provide for pass through of any variation in raw material costs. However, our cash flows may still be adversely affected on account of gaps in the time between the date of procurement of primary raw materials and date on which we can reset the product prices for our customers, to account for an increase in the prices of such raw materials.

Our ability to manage our operating costs and operations efficiencies is critical to maintaining our competitiveness and profitability. Our profitability is partially dependent on our ability to increase our productivity and reduce our operating expenses.

Relationship With and Purchasing Patterns of our Key Customers

We have established long-standing relationships with a diverse set of customers, having served over 300 customers in Fiscal 2026, including 22 private banks, 12 PSU banks, 11 small finance banks, 78 co-operative banks, and 47 fintech companies.

As of March 31, 2026, we had serviced over 211 customers, comprising 61.34% of our total customer base, for more than five years. Set forth below are details of our revenues from our largest customer, top five and top 10 customers, in the years indicated:

(2) Names of largest, top 5 and top 10 customers have not been disclosed due to non-receipt of consent.

The effect of variations in our customers purchasing patterns is based on the forecasts from the customers regarding the dem and for credit cards, cheques, passbooks and other products from end-customers. In addition, to cater to the increasing requirements from banks, we have initiated bundled offerings of cheques, cards, collaterals and secure logistics as a combined offering that acts as an integrated solution for banks in servicing their end-customers. We intend to grow our efforts in marketing these bundled solutions to our existing customers and attempt to acquire additional customers by communicating this attractive value proposition, which removes banks requirement to liaise with various vendors. To attract customers in different regions, in India and outside, we have set up personalization bureaus and entered into agreements with external marketing companies to advertise and deliver our products. We aim to expand our geographical presence in order to supply products with low turnaround times, and to manufacture base products that can be personalized locally to meet specifications. Our customers continued relationship with us will also depend on the success of these personalization bureaus and global agents in offering solutions and supplying products with required customizations within a limited time.

Any increases or decreases in the levels of orders placed by our customers are likely to have an effect on our revenues and our results of operations. End-customers, in turn, are dependent on general trends in the macroeconomic environment in India and globally. See, "— Demandfor Payment Cards in India and Globally on page 430.

Integration of Our Acquired Operations

We acquired the VDP business of MTL, including printing of cheques, personalized customer communications/ statements, government identification, insurance policy booklets, secure logistics, among others, pursuant to business transfer agreement dated April 30, 2024, with effect from March 31, 2024. As part of our VDP business, we provide secure printing solutions including cheque books (personalized and non-personalized), security forms and stationery, welcome kits, envelopes, statements, reports, policy booklets, and passbooks. Our in-house facility processes encrypted banking data to produce customized, brand-aligned cheques with rigorous security checks, ensuring safe and efficient clearing.

Further, as part of the Revenue Assurance Acquisition, we acquired the smart tagging and internet of things solutions, along with holograms, coated products, and other security printed products business of MTL pursuant to a slump sale agreement dated

April 1, 2025 and with effect from even date. Pursuant to Revenue Assurance Acquisition, we provide smart tagging and internet of things solutions, along with holograms, coated products, and other security printed products to customers.

We may continue to actively pursue inorganic growth opportunities to expand our market presence and enhance our service offerings. The acquired businesses pose significant growth opportunities for us. Our results of operations will be affected by our ability to successfully integrate the acquired businesses with our existing business. Customers of such acquired businesses may choose not to renew their agreements or enter into new agreements with our Company, and we may be required to acquire new customers in order to derive the expected benefits from the acquisition. As such, our results of operations are likely to be affected by the synergies we derive from the acquisition, including our ability to successfully provide bundled offerings that require integration of our businesses.

PRESENTATION OF FINANCIAL INFORMATION

Our restated financial information comprise (a) the restated consolidated statement of assets and liabilities as at March 31, 2026 and March 31, 2025, the restated consolidated statement of profit and loss (including other comprehensive income), the restated consolidated statement of cash flows and the restated consolidated statement of changes in equity for the years ended March 31, 2026 and March 31, 2025, and (b) the restated standalone statement of assets and liabilities as at March 31, 2024, the restated standalone statement of profit and loss (including other comprehensive income), the restated standalone statement of cash flows and the restated standalone statement of changes in equity for the year ended March 31, 2024 and notes forming part of restated financial information (hereinafter collectively referred to as "Restated Financial Information").

The Restated Financial Information and have been compiled by the management of our Company from the (i) audited special purpose financial statements as at and for the years ended March 31, 2026 and March 31, 2025 and March 31, 2024 comprising (a) the audited special purpose consolidated balance sheet as at March 31, 2026 and March 31, 2025, the audited special purpose consolidated statement of profit and loss (including other comprehensive income), the audited special purpose consolidated statement of cash flows and the audited special purpose consolidated statement of changes in equity for the years ended March 31, 2026 and March 31, 2025; and (b) the audited special purpose standalone balance sheet as at March 31, 2024, the audited special purpose standalone statement of profit and loss (including other comprehensive income), the audited special purpose standalone statement of cash flows and the audited special purpose standalone statement of changes in equity for the year ended March 31, 2024 and notes forming part of audited special purpose financial statements (collectively referred to as "Audited Special Purpose Financial Statements").

Our Company acquired VDP business and Revenue Assurance business of MTL. The aforesaid acquisitions are "common control" transactions in accordance with Ind AS 103 Business Combinations. Accordingly, the Company has restated the comparative periods presented in its historical consolidated financial statements in accordance with Appendix C to Ind AS 103 insofar as it relates to common control business combination. The Restated Financial Information is compiled based on the underlying historical consolidated financial statements as stated above.

MATERIAL ACCOUNTING POLICIES

Basis of Measurement

These Restated Financial Information are prepared in accordance with Indian Accounting Standards (Ind AS) under the historical cost convention on the accrual basis, except for the following which have been measured at fair value:

• certain financial assets and liabilities which are measured at fair value (refer accounting policy regarding financial instruments);

• defined benefit plans measured at fair value; and

• share- based payments.

Use of estimate, assumption and judgement

In the application of the Groups accounting policies, the management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if revision affects both current and future periods.

Information about judgements made in applying accounting policies that have the most significant effects on the amounts recognised in the restated financial information is included in the following notes:

Judgements

Lease term: whether the group is reasonably certain to exercise extension options.

Estimates

Information about assumptions and estimation uncertainties at the reporting date that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year is included in the following notes:

• Useful lives of Property, plant and equipment and intangible assets

• Measurement of defined benefit obligation; key actuarial assumptions

• Provision for taxation

• Provision for warranty

• Provision for disputed matters

• Measurement of lease liabilities and right of use asset Property, plant and equipment

Property, plant and equipment are stated at historical cost less accumulated depreciation and accumulated impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items such as purchase price, freight, duties and levies. Such cost includes the cost of replacing parts of the Property, Plant and Equipment and the borrowing cost till the date of installation of qualifying asset and any attributable cost of bringing the asset to its working condition for its intended use, including exchange differences. Freehold land is carried at historical cost.

Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. All other repairs and maintenance are charged to Restated Statement of Profit and Loss during the reporting period in which they are incurred.

An item of Property, plant and equipment and any significant part initially recognised is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the Restated Statement of Profit and Loss when the asset is derecognized.

Advances paid towards the acquisition of property, plant and equipment outstanding as at each reporting date are classified as capital advances under other non-current assets and the cost of assets not ready to use before such date are disclosed under Capital Work-in-Progress.

Depreciation on Property, plant and equipment is provided on the Straight Line Method over the useful lives of the assets. Depreciation for the assets purchased/sold during the period is proportionately charged.

The estimated useful life are as below:

The useful lives mentioned above for few of the plant and machinery are based on managements assessment, taking into account factors such as the nature of the assets, the estimated usage pattern of the assets, the operating conditions, past history of replacement, anticipated technological changes, manufacturers warranties and maintenance support, etc.

Policy with regard to depreciation of assets taken on lease i.e., right of use assets.

Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses over the useful life. The useful lives of all the intangible assets of the Group are assessed as finite.

Taxation

Income tax expense for the period comprises of current and deferred income tax. Income Tax expense is recognised in Restated Statement of Profit and Loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity, in which case tax is also recognised in other comprehensive income or in equity, as appropriate. Current Income Tax, for current and prior periods is recognised in the Restated Statement of Profit and Loss at the amount expected to be paid to or recovered from the tax authorities, using tax rates and tax laws that have been enacted or substantively enacted by the reporting date.

Deferred income tax assets and liabilities are recognised for all temporary differences between the carrying amounts of assets and liabilities in the financial statements and their corresponding tax bases used in the computation of taxable profit. The Group recognizes a deferred tax asset arising from unused tax losses or tax credit only to the extent that it is probable that sufficient future taxable profits will be available against which unused tax losses or tax credits can be utilized by the Group. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The carrying amount of deferred tax liabilities and assets are reviewed at the end of each reporting period. Deferred tax assets and liabilities are presented in the restated statement, of assets and liabilities after setting off the same against each other.

Advance income tax paid (including tax deducted at source, tax paid on self-assessment or otherwise) and provision for current income tax are presented in the restated statement, of assets and liabilities after setting off the same against each other.

Financial instruments

Classifications, initial recognition and measurement

The Group recognizes financial assets and financial liabilities if any, when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognised at fair value on initial recognition, except for trade receivable which is initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities that are not at fair value through profit or loss, are added to the fair value on initial recognition.

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, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

• Level 2 inputs are other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

• Level 3 inputs are unobservable inputs for the asset or liability

Non derivative financial instruments Financial assets carried at amortized cost

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

Financial assets at Fair Value through Other Comprehensive Income (FVTOCI)

A financial asset other than equity investment is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on principal amount outstanding. Further, in cases where the Group has made an irrevocable election based on its business model, for its investments which are classified as equity investments, the subsequent changes in the fair value are recognised in other comprehensive income.

Financial assets at Fair Value through Profit or Loss (FVTPL)

A financial asset which is not classified in any of the above categories is subsequently fair valued through profit or loss.

Financial liabilities

Financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the reporting date, the carrying amounts approximate fair value due to the short maturity of these instruments.

Classification as debt or equity

An instrument issued by the Group is classified as financial liability or as equity in accordance with the substance of the contractual arrangements and the definition of a financial liability and an equity instrument.

Equity instruments

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

Repurchase of the Groups own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in Restated Statement of Profit and Loss on the purchase, sale, issue or cancellation of the Groups own equity instruments. Dividend paid on equity instruments are directly reduced from equity.

Other equity investments

All other equity investments if any, are measured at fair value, with value changes recognised in Restated Statement of Profit and Loss, except for those equity investments for which the Group has elected to present the value changes in ‘Other Comprehensive Income.

Financial guarantee contracts

Financial Guarantee Contracts are initially recognised at fair value of guarantee. The subsequent measurement of Financial guarantee is higher of:

• the amount of the loss allowance determined

• the amount initially recognised less, when appropriate, the cumulative amount of income recognised in accordance with the principles of Ind AS 115.

Derecognition of financial instruments

The Group derecognises a financial asset when the contractual right to cash flows from the financial asset expires or when it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability is derecognised from the Groups restated statement of assets and liabilities when the obligation specified in the contract is discharged, cancelled or when it expires.

Fair value of financial instruments

In determining the fair value of its financial instruments, the Group uses generally acceptable methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include discounted cash flow analysis, available quoted market prices and dealer quotes. All methods of assessing fair value result in general approximation of value and such value may never be actually realised.

For financial assets and liabilities maturing within one year from the reporting date and which are not carried at fair value, the carrying amounts approximate fair value due to the short maturity of these instruments.

Inventories

Stock of raw materials, work-in-progress, trading materials, stores, spares, process materials and packing materials are valued at lower of cost or net realisable value adopting weighted average method. Cost of inventories shall comprise all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost also includes expenses incurred towards wages and other related items. Spare parts which do not meet definition of property plant and equipment, i.e. when the group intends to use these during the period of 12 months or less, are being considered as inventory.

Due allowance is estimated and made by the management for slow moving / non-moving items of inventory, wherever necessary, based on the past experience and such allowances are provided.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. The net realisable value of work-in-progress is determined with reference to the selling prices of related finished goods. Raw materials, components and other supplies held for use in the production of finished products are not written down below cost except in cases when a decline in the price of materials indicates that the cost of the finished products shall exceed the net realisable value.

Revenue recognition:

Revenue from contract with customers:

The Group derives revenues primarily from sale of Products and services.

Revenue is measured based on the consideration that is specified in a contract with a customer or is expected to be received in exchange for the products or services and excludes amounts collected on behalf of third parties. Revenue is recognized upon transfer of control of promised products or services to customers. To recognize revenues, the Group applies the following five step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenues when a performance obligation is satisfied.

The revenue is recognised when (or as) the performance obligation is satisfied, which typically occurs when (or as) control over the products or services is transferred to a customer.

Contract modifications are accounted for when additions, deletions or changes are approved either to the contract scope or contract price. The accounting for modifications of contracts involves assessing whether the products/services added to an existing contract are distinct and whether the pricing is at the standalone selling price. Products/Services added that are not distinct are accounted for on a cumulative catch-up basis, while those that are distinct are accounted for prospectively, either as a separate contract, if the additional products/services are priced at the standalone selling price, or as a termination of the existing contract and creation of a new contract if not priced at the standalone selling price.

Revenues in excess of invoicing if any, are classified as contract assets (which the Group refer as unbilled revenue) while invoicing in excess of revenues if any, are classified as contract liabilities (which the Group refer to as unearned revenues).

The Group accounts for rebates/discounts to customers as a reduction of revenue based on the underlying performance obligation that corresponds to the progress by the customer towards earning the rebate/discount.

Interest and other income

Interest Income from a financial asset is recognized using the effective interest method. Interest on refund of Income Tax and insurance claims are accounted in the year of receipt.

Functional currency and foreign currency transactions

Foreign currencies

The functional currency of the Company is Indian rupee. Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions.

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction. At the end of each reporting period, monetary assets and liabilities denominated in foreign currencies are translated using exchange rates in effect at the reporting date. Exchange differences arising on settlement or translation of monetary items are recognised in Restated Statement of Profit and Loss.

Non-monetary items that are denominated in a foreign currency and measured at historical cost are not retranslated at the end of each reporting period. They are reported using the exchange rate in force on the date of transaction. Non-monetary items that are denominated in a foreign currency and measured at fair value are reported at the exchange rates prevalent on the date when the fair value was determined. The exchange gain or loss on non-monetary items is treated in line with the recognition of the overall gain or loss on such non-monetary item i.e. translation or settlement differences on non-monetary items whose gain or loss is recognised in Other Comprehensive Income or Restated Statement of Profit and Loss are also recognised in Other Comprehensive Income or Restated Statement of Profit and Loss respectively.

Translation of financial statements of foreign entities

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Companys foreign operatio ns that have a functional currency other than Indian Rupees are translated into Indian Rupees using exchange rates prevailing at the reporting date. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising, if any, are recognised in other comprehensive income and held in foreign currency translation reserve ("FCTR"), a component of equity. When a foreign operation is disposed of, the relevant amount recognised in FCTR is transferred to the consolidated restated statement of profit and loss as part of the profit or loss on disposal.

Employee benefits

Short-term employee benefits

Employee benefits such as salaries, wages, short term compensated absences, expected cost of bonus, ex-gratia and performance linked rewards such as annual variable pay falling due wholly within twelve months of rendering the service are classified as short term benefits and are expensed in the period in which the employee renders the related service.

Defined contribution plans

Provident fund scheme, employee state insurance scheme and employee pension scheme are the Groups defined contribution plans. The contribution paid or payable under the scheme is recognised during the period in which the employee renders the related service.

Gratuity

The Group provides for gratuity, a defined benefit plan covering eligible employees. The gratuity plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employees salary and tenure of employment with the Group.

The Groups contribution towards gratuity is invested in a Group gratuity policy with the insurance company. Deficit/Surplus of present value of obligations (under Gratuity policy) over the fair value of gratuity plan assets is recognised in the Balance Sheet as an asset or liability. The same is determined based on an independent actuarial valuation using the Projected Unit Cost Method. Gains and losses through remeasurement of the net gratuity liability/(asset) are recognised in Other Comprehensive Income and are reflected in Other Equity and the same are not eligible to be reclassified subsequently to Profit or Loss. Premium expense incurred to keep in effect such a group gratuity policy is recognised in the Restated Statement of Profit and Loss as employee benefit expense in the year such premium falls due.

Compensated absences

Accumulated absences expected to be carried forward beyond twelve months is treated as long-term employee benefit for measurement purposes. The Company accounts for its liability towards compensated absences based on actuarial valuation

done as at the balance sheet date by an independent actuary using the Projected Unit Credit Method. The liability includes the long term component accounted on a discounted basis and the short term component which is accounted for on an undiscounted basis.

Employee share based payments

The Group recognises compensation expense relating to share based payments in accordance with Ind AS 102 Share-based Payment. Stock options granted by the Company to its employees are accounted as equity settled options. Accordingly, the grant date fair value of equity settled share-based payment awards granted to employees of the Company is recognised as employee benefit expense with corresponding increase in equity. The total expense w.r.t., options granted to employees of the Company is recognised over the vesting period, which is the period over which all the specified vesting conditions are required to be satisfied. At the end of each reporting period, the Company revises its estimates of the number of options that are expected to vest based on the service and non-vesting conditions. It recognises the impact of the revision to original estimates, if any, in the restated statement of profit and loss, with a corresponding adjustment to equity.

Under a group share-based payment arrangement, options granted to the employees of Manipal Technologies Limited (holding company) are reimbursed by holding company. Accordingly, these amounts are recognised as receivables from holding company and are not recognised as an expense in the Groups financial statements.

Leases

The Groups lease asset (taken on long term basis) wholly consists of land, buildings and machineries. The Group assesses whether a contract is or contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether: (i) the contract involves the use of an identified asset (ii) the Group has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Group has the right to direct the use of the asset.

At the date of commencement of the lease, the Group recognises a right-of-use asset ("ROU") and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and leases of low value assets if any. For these short term and leases of low value assets if any, the Group recognises the lease payments as an operating expense.

The right-of-use assets are initially recognised at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses, if any. Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term or useful life of the underlying asset.

The lease liability is initially measured at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates. 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.

A lease liability is remeasured upon the occurrence of certain events such as a change in the lease term or a change in an index or rate used to determine lease payments. The remeasurement normally also adjusts the leased assets.

Right of use asset (ROU Asset) have been separately presented in the restated statement of assets and liabilities. Corresponding lease liabilities are being disclosed as other financial liabilities either as current or non current depending on the period of reversal and lease payments have been classified as financing cash flows.

Borrowing cost

Borrowing cost includes interest expense calculated using the effective interest method, finance expenses in respect of assets acquired on lease.

Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset, are capitalised/ inventoried as a part of cost of such asset till such time the asset is ready for its intended use. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.

All other borrowing costs are recognized as expenses in the period in which they are incurred.

Provisions, contingent liabilities and contingent assets

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past events and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. When the unavoidable costs of meeting obligations under a contract, exceed the economic benefits expected to be received under such contract (onerous contract), then the present obligation under the contract is recognised and measured as a provision.

Contingent liability is disclosed in the notes to accounts when in case of a present obligation arising from past events, it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the same is not possible.

Contingent assets are disclosed in the notes to accounts when an inflow of economic benefits is probable.

Warranties

The estimated liability for product warranties is recorded when products are sold. These estimates are established using historical information on the nature, frequency and average cost of warranty claims and management estimates regarding possible future incidence based on corrective actions on product failures. The timing of outflows will vary as and when warranty claim will arise.

Basis of consolidation

Subsidiaries

This Restated Financial Information include Manipal Payment and Identity Solutions Limited and its Subsidiaries, Manipal Payment & Identity Solutions Nigeria Limited, Manipal Payment and Identity Solutions UK Limited (formerly known as Manipal Payment and Identity Solutions Limited) and Manipal Payment and Identity Solutions Inc (collectively referred to as the "Group"). Subsidiaries are the entities controlled by the Company. Control exists when the Company (a) has power over the investee, (b) it is exposed, or has rights, to variable returns from its involvement with the investee and (c) has the ability to affect those returns through its power over the investee.

The financial statements of the parent and its subsidiaries are consolidated on a line-by-line basis by adding together like items of assets, liabilities, income, and expenses. Inter-company transactions and balances are eliminated in full on consolidation. Uniform accounting policies are applied to the subsidiaries within the Group.

Note: During the year ended March 31, 2026, the Company incorporated a subsidiary, namely, MPI Global Limited on March 12, 2026 in UAE. However, as on the date of Restated Financial Information, no capital contribution has been made by the Company in the aforesaid subsidiary, and the entity has not yet commenced business operations. Accordingly, since no financial information is available for this subsidiary, no financial information pertaining to it has been included in the Restated Financial Information.

Segment reporting

Operating segment reflect the Groups management structure and the way the financial information is regularly reviewed by the Board of Directors (the Groups Chief Operating Decision Maker (CODM)). The CODM considers the business from both business and product perspective based on the dominant source, nature of risks and returns and the internal organisation and management structure.

The Group has one operating segment, namely "Payment and Identity Solutions" and the information reported to the Chief Operating Decision Maker (CODM) for the purposes of resource allocation and assessment of performance focuses on this operating segment.

Impairment of assets

Financial assets

In accordance with Ind AS 109, the Group applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:

• Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, deposits and bank balances.

• Trade receivables that result from transactions that are within the scope of Ind AS 115.

The Group follows ‘simplified approach for recognition of impairment loss. The application of simplified approach does not require the Group to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition. For recognition of impairment loss on other financial assets and risk exposure, the Group determines that whether there has been a significant increase in the credit risk since initial recognition.

Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. As a practical expedient, the Group uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.

Non-Financial assets including intangible assets and property, plant and equipment

As at each reporting date, the Group assesses whether there is an indication that a non-financial asset may be impaired and also whether there is an indication of reversal of impairment loss recognised in the previous periods. If any indication exists, or when annual impairment testing for an asset is required, the Group determines the recoverable amount and impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount.

Recoverable amount is determined:

• In case of an individual asset, at the higher of the assets fair value less cost to sell and value in use; and

• In case of cash generating unit (a group of assets that generates identified, independent cash flows), at the higher of cash generating units fair value less cost to sell and value in use.

In assessing value in use, the estimated future cash flows are discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and risk specified to the asset. In determining fair value less cost to sell, recent market transaction are taken into account. If no such transaction can be identified, an appropriate valuation model is used.

Impairment losses of continuing operations, including impairment on inventories, are recognised in the Restated Statement of Profit and Loss.

When the Group considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, then the previously recognised impairment loss is reversed through the Restated Statement of Profit and Loss.

Earnings per share (EPS)

Basic Earnings per share

Basic earnings per equity share is calculated by dividing the net profit or loss after tax (before considering other comprehensive income) for the year attributable to equity shareholders of our Company by the weighted average number of equity shares outstanding during the year.

Diluted Earnings per share

Diluted earnings per equity share, is computed by dividing the net profit or loss for the year as adjusted for dividend, interest and other expenses relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the year, unless issued at a later date. In computing diluted earnings per share, only potential equity shares that are dilutive and that either reduces earnings per share or increases loss per share are included.

As required under Ind AS 33 "Earning Per Share" the effect of any split/bonus after the end of reporting period is given for the purpose of computing earning per share for all the period presented retrospectively.

Restated Statement of Cash Flows

Cash flows are reported using the indirect method in accordance with Ind AS 7 "Statement of Cash Flows", whereby profit for the year is adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and items of income or expenses associated with investing or financing cash flows. The cash flows are segregated into operating, investing and financing activities.

Cash and cash equivalents

Cash and cash equivalents comprise cash in hand and at bank (in current accounts) and term deposits with original maturity up to 3 months. Term deposits maturing beyond 3 months, earmarked balances with banks and deposits held as margin money or security against borrowings etc. is not considered as Cash and Cash Equivalents.

Events after reporting date

Subsequent events are evaluated through the date the Restated Financial Information are issued. Events providing additional evidence about conditions existing at the reporting date are recognized in the financial statements. Events indicative of conditions arising after the reporting date are disclosed if material.

Current / Non-current classification

The Group presents assets and liabilities in the restated statement of assets and liabilities based on current/ non-current classification. An asset is treated as current when it is:

• Expected to be realised or intended to be sold or consumed in normal operating cycle,

• Held primarily for the purpose of trading,

• Expected to be realised within twelve months after the reporting period, or

• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period

All other assets are classified as non-current.

A liability is current when:

• It is expected to be settled in normal operating cycle,

• It is held primarily for the purpose of trading,

• It is due to be settled within twelve months after the reporting period, or

• There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period

All other liabilities are classified as non-current.

Based on the nature of activities of the Group, the Group has determined its operating cycle as 12 months.

Regrouping of Previous Years figures

The Group has the policy of regrouping certain figures for the purpose of better presentation and/or to comply with the amended Indian Accounting Standards and/or Schedule III to Companies Act 2013, if any.

Recent accounting pronouncements

Newly amended standards

The Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. Key amendments relevant to the Group are summarised below:

Ind AS 21 - Effects of changes in foreign exchange rates (lack of exchangeability)

In May 2025, MCA notified amendments to Ind AS 21 - The Effects of Changes in Foreign Exchange Rates, applicable w.e.f. April 1, 2025. The effects of changes in foreign exchange rates specify how an entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate when exchangeability is lacking. The amendments also require disclosure of information that enables users to understand how the currency not being exchangeable into the other currency affects, or is expected to affect, the entitys financial performance, financial position and cash flows.

The Group currently does not deal in such currencies and hence there is no impact on the financial statements. The Group will assess the implications of this amendment for future periods.

Ind AS 7 - Statement of cash flows and Ind AS 107 - Financial Instruments: disclosures (supplier finance arrangements)

In August 2025, MCA notified amendments to Ind AS 7 - Statement of cash flows and Ind AS 107 - Financial Instruments: disclosures, applicable w.e.f. April 1, 2025. The amendment in Ind AS 7 requires to inform users of financial statements of the existence of supplier finance arrangements and explain the nature of the arrangements, the carrying amount of liabilities and the range of payment due dates. Ind AS 107 has been amended to add supplier finance arrangements as a factor that may cause concentration of liquidity risk..

The Group does not have any supplier finance arrangements; hence, no material impact is expected.

Ind AS 12 - Income taxes (Pillar two model rules)

In August 2025, MCA notified amendments to Ind AS 12, International tax reform - Pillar two model rules applicable immediately. The amendments provide a temporary mandatory relief from deferred tax accounting for top-up tax and require companies to disclose that they have applied the relief. This relief is immediate and applies retrospectively. The amendments also require companies to provide new disclosures to compensate for potential loss of information resulting from the relief. Such disclosures are to be provided for annual reporting periods beginning on or after April 01, 2025.

These amendments does not have impact on our financial statements.

Ind AS 1 - Presentation of Financial Statements

In August 2025, MCA notified amendments to Ind AS 1 Presentation of Financial Statements, applicable w.e.f. April 1, 2025. The amendment relates to classification of liabilities as current or non - current and non-current, liabilities with covenants. In the context of l classifying a liability as current, it removes the requirement of existence of a right to defer settlement for at least 12 months after the reporting date and instead requires that the said right should exist on the reporting date and have substance. The amendment also introduces guidance on classification of liabilities with covenants.

The Group has no impact of these amendments in its classification criteria of current and non-current liabilities.

Standards notified but not yet effective

(i) In accordance with Ind AS 1 currently applicable, breach of an immaterial covenant is ignored deciding in current vs. non-current classification of liabilities. Also, in case of breach of a material covenant of a non-current loan on or before the reporting date, the entity can obtain waiver from the lender after the reporting date and continue to classify the loan as non-current liability. In accordance with changes to Ind AS 1 already notified by the MCA, the above relaxations to classify loan as non-current liability will not be available from Fiscal 2026 to 2027 onward and need to be applied retrospectively.

Consequently, a breach of either material or immaterial covenant will trigger current classification of liability. To continue classifying loan as non-current liability, entities will need to obtain waiver from the breach on or before the reporting date. The Group is currently assessing the impact the amendments will have on its financial statements.

(ii) Ind AS 109 - Financial Instruments and Ind AS 107 - Financial Instruments: disclosures

In August 2026, MCA notified amendments to Ind AS 109 and Ind AS 107, applicable w.e.f. April 1, 2026. The amendments clarify the date on which financial assets and financial liabilities are recognised and derecognised, permit an entity to elect to deem a financial liability settled in cash using an electronic payment system to be discharged before the settlement date subject to specified criteria and clarify the assessment of contractual cash flows as solely payments of principal and interest for financial assets with contingent features, non-recourse features and contractually linked instruments, with consequential disclosures in Ind AS 107. Separate amendments address contracts referencing nature-dependent electricity, covering the own use assessment, hedge designation and related disclosures. The Group is currently assessing the impact the amendments will have on its financial statements.

(iii) Other Amendments to Ind AS (2024)

In August 2026, MCA notified amendments to Ind AS (2024), amending Ind AS 101, Ind AS 107, Ind AS 109, Ind AS 110 and Ind AS 7, applicable w.e.f. April 1, 2026. The amendments are narrow in scope and relate to hedge accounting by a first-time adopter, disclosure of gain or loss on derecognition of transferred financial assets, derecognition of lease liabilities and initial measurement of trade receivables, determination of a de facto agent and reporting of cash flows in respect of investments accounted for at cost.

Business combination under common control

Business combinations involving businesses/entities under common control are accounted under pooling of interest method.

In accordance with pooling of interest method:

• The assets and liabilities of the combining businesses/entities are reflected at their carrying amounts.

• No adjustments are made to reflect fair values, or recognise any new assets and liabilities. Adjustments if any, are made to harmonise accounting policies/estimates.

• The financial information in the financial statements in respect of prior periods is restated as if the business combination had occurred from the beginning of the preceding period in the financial statements, irrespective of the actual date of the combination. However, where the business combination had occurred after that date, the prior period information is restated only from that date.

• The balance of the retained earnings appearing in the financial statements of the transferor is aggregated with the corresponding balance appearing in the financial statements of the transferee or is adjusted against general reserve

• The identity of the reserves are preserved

• The difference, if any, between the amounts recorded as owners net investment/equity and consideration paid in the form of cash or other assets is recorded as amalgamation adjustment reserve and is presented separately.

CHANGES IN ACCOUNTING POLICIES

There have been no changes in the accounting policies of the Company during the last three Fiscals.

NON-GAAP MEASURES

Certain measures such as EBITDA, EBITDA Margin, PAT Margin, Fixed Asset Turnover Ratio, Return on Equity, Return on Capital Employed, Debt to Equity Ratio, Current Ratio, and Gross Profit Ratio (together, "Non-GAAP Measures"), presented in this Red Herring Prospectus are a supplemental measure of our performance and liquidity that is not required by, or presented in accordance with, Ind AS, IFRS, US GAAP or any other GAAP. Further, these Non-GAAP Measures are not a measurement of our financial performance or liquidity under Ind AS, IFRS, US GAAP or any other GAAP and should not be considered in isolation or construed as an alternative to cash flows, profit/ (loss) 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, IFRS, US GAAP or any other GAAP. In addition, these Non-GAAP Measures are not standardised terms, hence a direct comparison of these Non-GAAP Measures between companies may not be possible. Other companies may calculate these Non-GAAP Measures differently from us, limiting their usefulness as a comparative measure. Although such Non-GAAP 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 or financial performance. For further information, see "Risk Factors - We have in this Red Herring Prospectus included certain non-GAAP financial measures and certain other industry measures related to our operations andfinancial performance. These non-GAAP measures and industry measures may vary from any standard methodology that is applicable across the industries in which we operate, and therefore may not be comparable with financial or industry related statistical information of similar nomenclature computed and presented by other companies." on page 53.