Marushika Technology Ltd Management Discussions

The following discussion is intended to convey managements perspective on our financial condition and results of operations for the financial year ended March 31, 2025 and financial year ended March 31, 2024, and for the financial year ended March 31, 2023. One should read the following discussion and analysis of our financial condition and results of operations in conjunction with our section titled "Financial Statements" and the chapter titled "Financial Information" on page 252 of the Draft Red Herring Prospectus. This discussion contains forward-looking statements and reflects our current views with respect to future events and our financial performance and involves numerous risks and uncertainties, including, but not limited to, those described in the section entitled "Risk Factors" on page 32 of this Draft Red Herring Prospectus. Actual results could differ materially from those contained in any forward-looking statements and for further details regarding forward- looking statements, kindly refer the chapter titled "Forward-Looking Statements" on page 20 of this Draft Red Herring Prospectus. Unless otherwise stated, the financial information of our Company used in this section has been derived from the Restated Financial Information. Our financial year ends on March 31 of each year. Accordingly, unless otherwise stated, all references to a particular financial year are to the 12-month period ended March 31 of that year.

In this section, unless the context otherwise requires, any reference to "we", "us" or "our" refers Marushika Technology Limited, our Company. Unless otherwise indicated, Financial information included herein are based on for the financial Years 2025, 2024 & 2023 included in this Draft Red Herring Prospectus beginning on page 252 of this Draft Red Herring Prospectus.

BUSINESS OVERVIEW

We, Marushika Technology Limited, is engaged in the business of distribution of Information Technologies (IT) and Telecom Infrastructure products. We provide wide range of IT products and services to our clients in setting up their data centres infrastructure, active networking, telecom system, advanced surveillance systems, data protection, cybersecurity and power management. We also offer installation, maintenance services and assisting clients in selecting the right type of IT infrastructure for their specific need. Additionally, Our Company offers a range of smart solution including smart access control, parking, lighting, and waste management.

Further, our company have expanded our offerings to include Auto-tech solutions for Defence, where we offer various services comprising of maintenance, refurbishment, and reverse engineering of tracked and wheeled military vehicles. The Company generated some revenue from this vertical in the financial year 2024–25 and has additional assignments in the pipeline. Currently, our company has completed one project with respect to the Auto tech solution for defence, the details of which has been disclosed under heading "Our Completed Projects".

Our company primarily operates on a Business to Business (B2B) model and Business-to-Government (B2G). We generate revenue by providing services to both government and non-government clients, where the ultimate end customer is often a government. Further, we provide products and services to Government sector including Bharat Electronic Limited (BEL), Central Electronic Limited (CEL), Delhi Metro Rail Corporation (DMRC) and National Security Guard (NSG).

We offer our product and service to Infrastructure projects of various verticals of Central & State Government and Public Sector Units (PSU) such as Finance, Insurance, Railways, Defence, Education and Health.

Over the year, we have steadily expanded our execution capabilities and successfully completed more than 150 projects. As on July 31, 2025 we have ongoing projects of an aggregate amount of Rs. 2,835.42 Lakhs.

For more details of the project, kindly refer the heading "Details of Completed and Ongoing Project" on page no.

172 and 176 respectively of this Draft Red Herring Prospectus.

Our Company is an ISO/IEC 27001:2022 and ISO 9001:2015 certified company, issued by Delano Assessment Private Limited and Care Certification Private Limited in compliance with Information Security Management Systems and Quality Management System respectively. For further details please refer to the chapter titled "Government and Other Approvals" beginning on page 291 of this Draft Red Herring Prospectus

SIGNIFICANT DEVELOPMENTS SUBSEQUENT TO THE LAST FINANCIAL YEAR

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 inthe Draft Red Herring Prospectus and which materially and adversely affect or is likely to affect within the next twelve months except as follows:

• The Board of Directors of our Company has approved and passed resolution on June 02, 2025 to authorize the Board of Directors to raise the funds by way of Initial Public Offering.
• The Shareholders of our Company has approved and passed a resolution on June 18, 2025, to authorize the issue by way of Initial Public Offering
• The board of directors in its meeting held on December 17, 2024 appointed Mr. Gaurav Jain as Additional Independent Director of the Company.
• The Shareholders of our Company appointed Mr. Sanjay Jindal and Mr. Pradeep Singh Mehta as Independent Directors in the Shareholders meeting held on December 20, 2024.
• Ms. Monicca Agarwaal has been appointed as Managing Director on January 15, 2025.
• The board of directors in its meeting held on January 01, 2025 appointed Ms. Kavin Arora as Company Secretary & Compliance officer of the Company.
• The board of directors in its meeting held on February 10, 2025 appointed Ms. Sonika Aggarwal as Chief Financial Officer of the Company.
• The board of directors in its meeting held on January 15, 2025 appointed Mr. Jai Prakash Pandey as Whole Time Director of the Company.
• Mr. Gaurav Jain has been resigned from their directorship in the board meeting dated March 27, 2025.
• Mr. Pradeep Singh Mehta has been resigned from their directorship in the board meeting dated May 21, 2025.
• The board of directors in its meeting held on May 21, 2025 appointed Mr. Sandeep Jain as Additional Independent Director of the Company and regularized in the shareholder meeting dated June 18, 2025.
• The board of directors in its meeting held on June 02, 2025 appointed Mr. Shishir Jha as Additional Independent Director of the Company and regularized in the shareholder meeting dated June 18, 2025.

SIGNIFICANT FACTORS AFFECTING OUR RESULTS OF OPERATIONS

Our business is subjected to various risks and uncertainties, including those discussed in the section titled "Risk Factor" 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:

• Strategic and Operational Risks

• Growth Strategy and Expansion: Our ability to successfully implement growth strategies and expansion plans is crucial to our future performance. Any failure in executing these strategies could hinder our progress.
• Geographic Expansion: Expanding into new regions or markets is central to our growth. The success of

this expansion depends on various factors, including market conditions, competition, and regulatory hurdles.

• Market and Economic Risks

• Economic Conditions: Both local and global economic conditions—such as inflation interest rates, and currency fluctuations—affect consumer demand and overall market dynamics, impacting our revenues.

• Market Demand and Supply: Our business performance is sensitive to changes in demand for our products and services. A decrease in demand or supply chain disruptions could negatively affect sales and profitability.
• Technology and Competitive Risks

• Technological Change: The industry in which we operate is evolving rapidly. Failure to adopt or integrate new technologies could result in competitive disadvantages and financial losses.
• Competition: The competitive landscape is constantly shifting. New entrants or existing competitors may increase pricing pressure and reduce our market share, directly impacting profitability.
• Political and Regulatory Risks

• Political Instability and Government Changes: Political instability, changes in government policies, or shifts in the political environment—particularly in India—could negatively affect our business operations and the broader economic landscape.
• Regulatory Changes: We operate in sectors that are regulated by national, state, and local governments. Changes in regulations could affect our operational flexibility, cost structures, or compliance requirements.

• Indias Sovereign Credit Rating: Any downgrade in Indias debt rating by international or domestic agencies could increase borrowing costs and adversely affect investor confidence, leading to financial instability.

• Financial Risks
• Capital Requirements: We require significant capital for ongoing operations, expansion, and development. Failure to raise sufficient funds or meet capital expenditure needs could impede business growth.

• Related Party Risks
• Conflict of Interest: Potential conflicts of interest with affiliated companies, promoters, or related parties may affect decision-making and operations, leading to possible legal or reputational risks.

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MANAGEMENT s DISCUSSION ON RESULT OF OPERATION

On the basis of restated consolidated financial statements

(Amount in Lakhs, except %)

S.N.	Particulars	For the year ended		For the year ended
		March 31, 2025	%age of Total Income	March 31, 2024	%age of Total Income
1	Revenue from Operations	8,524.87	99.56%	6,066.23	99.72%
II	Other Income	37.73	0.44%	17.21	0.28%
III	Total Income (I + II)	8,562.60	100.00%	6,083.44	100.00%
IV	Expenses
	Cost of sub-contract technical service	1,519.37	17.74%	486.53	8.00%
	Purchase of Stock-in-Trade	5,445.44	63.60%	4,590.45	75.46%
	Change in Inventories	0.00	0.00%	-	0.00%
	Employee Benefit Expenses	248.30	2.90%	226.81	3.73%
	Other expenses	234.83	2.74%	147.57	2.43%
	Financial Charges	230.00	2.69%	200.85	3.30%
	Depreciation & Amortisation Expenses	38.91	0.45%	25.02	0.41%
V	Total Expenses	7,716.85	90.12%	5,677.23	93.32%
VI	Profit before tax (III + IV)	845.75	9.88%	406.21	6.68%
VII	Tax expense:
	Current Tax	219.95	2.57%	92.23	1.52%
	Deferred Tax	(2.84)	(0.03%)	(0.13)	0.00%
	Total Tax Expense	217.11	2.54%	92.10	1.51%
VIII	Profit after tax for the period (VII + VIII)	628.64	7.34%	314.11	5.16%
IX	Earning per equity share:
	Basic & Diluted (Rs.)	10.21		5.21
	Adjusted after bonus issue	10.21		5.21

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On the basis of restated standalone financial statements:

(Amount in Lakhs, except %)

S.N o.	Particulars	For the year ended		For the year ended		For the year ended
		March 31, 2025	%age of Total Income	March 31, 2024	%age of Total Income	March 31, 2023	%age of Total Income
1	Revenue from Operations	8,524.87	99.56%	5,443.99	99.60%	3,698.90	99.88%
II	Other Income	37.79	0.44%	21.98	0.40%	4.28	0.12%
III	Total Income (I + II)	8,562.66	100.00%	5465.97	100.00%	3,703.18	100.00%
IV	Expenses
	Cost of sub-contract technical service	1,519.37	17.74%	486.53	8.90%	721.23	19.48%
	Purchase of Stock-in-Trade	5,445.44	63.60%	4,040.15	73.91%	2,377.28	64.20%
	Change in Inventories	0.00	0.00%	-	0.00%	27.17	0.73%
	Employee Benefit Expenses	248.30	2.90%	226.81	4.15%	209.75	5.66%
	Other expenses	219.32	2.56%	147.25	2.69%	160.91	4.35%
	Financial Charges	230.00	2.69%	200.85	3.67%	132.44	3.58%
	Depreciation & Amortisation Expenses	38.91	0.45%	25.03	0.46%	19.26	0.52%
V	Total Expenses	7,701.34	89.94%	5,126.62	93.79%	3,648.04	98.51%
VI	Profit before tax (III + IV)	861.32	10.06%	339.35	6.21%	55.14	1.49%
VII	Tax expense:
	Current Tax	219.95	2.57%	90.90	1.66%	14.63	0.40%
	Deferred Tax	(2.84)	(0.03%)	(0.13)	0.00%	0.26	0.01%
	Total Tax Expense	217.11	2.54%	90.77	1.66%	14.89	0.40%
VII I	Profit after tax for the period (VII + VIII)	644.21	7.52%	248.58	4.55%	40.25	1.09%
IX	Earning per equity share:
	Basic & Diluted (Rs.)	9.70		4.36		0.74
	Adjusted after bonus issue	9.70		4.36		0.74

Items for Restated Financials Statements

Our Significant Accounting Policies

For Significant accounting policies please refer Significant Accounting Policies", under Chapter titled Financial Statements beginning on page 252 of the Draft Red Herring Prospectus.

Overview of Revenue & Expenditure

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

Revenues

• Revenue of operations

Revenue is generated from the sale of IT and Smart products procured from various OEMs. Additionally, revenue is also derived from rendering services related to IT solutions, Smart solutions, and Auto Tech solutions to Finance, Insurance, Railways, Defence, Education and Health sector.

• Other Income

Other Income includes Interest from banks on deposits, Interest received on Income tax refund, Net gain on foreign currency transactions and translation, Profit on sale of property, plant and equipment etc.

Expenditure

Our total expenditure primarily consists of Cost of Service, Purchase of Stock in Trade, Employee Benefit Expenses, Financial Charges, Depreciation and Amortization, Other Expenses.

• Cost of Sub- Contract technical services

The Cost of Sub-Contract technical services include the cost of hiring IT Professional.

• Purchase of Stock in Trade

Purchase of stock in Trade includes purchase of IT Products, custom duty paid, Freight charges and other direct expenses.

• Change in Stock in Trade

Change in stock in Trade include is the change of opening and closing stock of the period.

• Employee Benefit Expenses

Our Employee Benefit Expenses primarily comprise of Director Remuneration, salaries, wages and bonus, PF Contribution, Gratuity, Staff Welfare.

• Financial Charges

Financial Charges include Interest expense on borrowings, Bank charges and other finance processing charges.

• Depreciation and Amortization

Depreciation and Amortization on Fixed Assets majorly include depreciation on the CAR, Furniture and Fittings, office equipment, computer and printers & other accessories.

• Other expenses

Other expenses include major expenses on business promotion expenses, commission, conveyance and travelling expenses, insurance, legal and professional charges, rates and tax, Repair & maintenance, Rent, Power, fuel and water.

CONSOLIDATED FINANCIAL STATEMENTS

FISCAL YEAR ENDED MARCH 31, 2025, COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2024 (BASED ON RESTATED CONSOLIDATED FINANCIAL STATEMENTS)

Revenues

• Total Income

Total Income for the Financial Year 31^st March 2025, stood at Rs. 8,562.60 Lakhs whereas in Financial Year 31^st March 2024 it stood at Rs 6,083.44 Lakhs representing an increase of 40.75%.

Reasons: The increase in the total income of the company is due to an increase in the revenue and other income of the company.

• Revenue of operations

Net revenue from operations for the Financial Year 31^st March 2025, stood at Rs. 8,524.87 Lakhs whereas in Financial Year 31^st March 2024 it stood at Rs. 6,066.23 Lakhs representing an increase of 40.53%.

Reason: The companys total revenue increased from Rs.6,066.23 lakhs in FY 2023–24 to Rs.8,524.87 lakhs in FY 2024–25. This strong growth was mainly due to an increase in both service income and trading activities during the year.

Service Revenue Growth:

• Income from services increased significantly from Rs.788.53 lakhs in FY 2023–24 to Rs.1,743.69 lakhs in FY 2024–25. This increase was mainly because the company received new service orders from several new customers during the year. These new services orders, worth Rs.969.00 lakhs, added to the companys overall revenue.

Trading Revenue Growth:

• Trading sales increased from Rs. 5,277.70 lakhs in FY 2023–24 to Rs. 6,781.18 lakhs in FY 2024–25.

A major factor contributing to this growth was a large trading order worth Rs. 3,000.00 lakhs (Rs. 30 crore) received from Bharat Electronics Limited (BEL) in FY 2023. Out of this total order value, the company completed work and raised invoices for Rs. 1,700.00 lakhs during FY 2024–25. In addition, there was an overall increase in the volume of trading transactions during the year, further boosting trading income compared to the previous year

In summary, the increase in total revenue was driven by more service orders from new customers and higher trading volumes supported by key contracts during the year.

(Amount in Lakhs)

Particulars	FY 2024 - 25	FY – 2023 - 24
Sale of Trading	6,781.18	5,277.70
Sale of services	1,743.69	788.53
Total Revenue	8,524.87	6,066.23

• Other Income

Other Income for the Financial Year 31^st March 2025 stood at Rs. 37.73 Lakhs whereas in the Financial Year 31^st March 2024 it stood at Rs. 17.21 Lakhs represent an increase of 119.23%.

Reason: There is an increase in other income because there was Interest from banks on deposits and interest received on other which was shown as the table below:

(Amount in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Interest from banks on deposits	7.80	5.22
Interest received on other	25.48	-

Expenditure

• Total Expenses

Total Expenses for the Financial Year 31^st March 2025, stood at Rs. 7,716.84 Lakhs whereas in the Financial Year 31^st March 2024 it stood at Rs 5,677.23 Lakhs representing an increase of 35.93%.

Reason: The increase on account of the increase in the cost of service, Purchase of Stock in Trade, Employee benefit expenses, other expenses, financial charges and depreciation and amortization.

• Cost of Sub - Contract technical services

The Cost of Subcontract Technical Services for the Financial Year 31^st March 2025, stood at Rs. 1,519.37 Lakhs whereas in Financial Year 31^st March 2024 it stood at Rs. 486.53 Lakhs representing an increase of 212.29%.

Reason: In FY 2025, the gross profit declined primarily due to a significant increase in the cost of services. Unlike FY 2024, which included high-margin (100%) export service tenders, the services executed in FY 2025 carried much lower margins. The absence of such lucrative contracts, coupled with higher service delivery costs, resulted in a reduced overall gross profit margin for the year.

• Purchase of Stock in Trade

The Purchase of Stock in Trade for the Financial Year 31^st March 2025, stood at Rs. 5,445.44 Lakhs whereas in

Financial Year 31^st March 2024 it stood at Rs. 4,590.45 Lakhs representing an increase of 18.63%.

Reason: The increase in Purchase of Stock-in-Trade during FY 2024–25 was mainly due to the growth in the companys trading business. Trading sales increase from Rs. 5,277.70 lakhs in FY 2023–24 to Rs. 6,781.18 lakhs in FY 2024–25, showing a significant increase.

• One of the key reasons for this growth was a new trading contract worth Rs. 1,700.00 lakhs received from Bharat Electronics Limited (BEL). To fulfill this large order, the company had to purchase IT products from vendors, which directly increased the stock-in-trade purchases.

• In addition to this, there was a general rise in the overall volume of trading transactions throughout the year. With more client orders and larger trading deals, the company needed to procure more goods to meet the growing demand. As a result, the total Purchase of Stock-in-Trade increased during the year, in line with the rising sales from trading activities.

• Employee benefit expense

The Employee benefit expense for the Financial Year 31^st March 2025, stood at Rs. 248.30 Lakhs whereas in Financial Year 31^st March 2024 it stood at Rs. 226.81 Lakhs representing an increase of 9.48%.

Reason: There was an increase in Employee benefit expenses due to an increase in salaries, wages, bonus and directors remuneration.

(Amounts in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Salaries, Wages & Bonus	83.60	67.45
Directors remuneration	151.95	145.20

• Finance Cost

The Finance Cost for the Financial Year on 31^st March 2025, stood at Rs. 230.00 Lakhs whereas in the Financial Year 31^st March 2024 it stood at Rs. 200.85 Lakhs representing an increase of 14.51% from the previous years.

Reason: The increase in finance costs was primarily due to an increase in interest on loans as company have increased their borrowing.

(Amount in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Interest on Loans	200.32	152.87
Total Borrowings	2,137.30	1,963.87

• Depreciation and Amortization Expenses

The Depreciation and Amortization Expenses for the Financial Year 31^st March 2025, stood at Rs. 38.91 Lakhs whereas in the Financial Year 31^st March 2024 it stood at Rs. 25.02 Lakhs representing an increase of 55.52%.

Reason: In the financial year 2024–25, depreciation on fixed assets increased primarily due to a higher opening Written Down Value (WDV) compared to the previous year (FY 2023–24). Additionally, the increase in Property, Plant and Equipment (PPE) by Rs. 67.39 lakhs during FY 2024–25 also contributed to the higher depreciation expense.

(Amount in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Opening balance	163.74	139.56
Addition	67.39	49.21
Deletion	-	-
Less - Depreciation	38.91	25.02
Closing balance of fixed assets	192.24	163.74

• Other Expenses

The Other Expenses for the Financial Year March 31, 2025, stood at Rs. 234.83 Lakhs whereas in Financial Year 31^st March 2024 it stood at Rs. 147.57 Lakhs representing an increase of 59.13%.

Reason: The increase in "Other Expenses due to substantial rise in Insurance Exp, Conveyance & Travelling

Expense, Legal & Professional Charges, Repair and maintenance expenses, Rates and taxes and Rent.

(Amounts in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Business promotion Exp.	41.08	4.25
Conveyance & Travelling Expense	26.49	15.17
Insurance	35.47	22.06
Legal & Professional Charges	42.64	31.50
Rates and taxes	24.18	9.34
Repair & maintenance	11.89	2.11
Rent	24.78	23.60

• Restated Profit before Tax

The restated profit before tax for the Financial Year 31^st March 2025, stood at Rs. 845.75 Lakhs whereas in Financial Year 31^st March 2024 it stood at Rs. 406.21 Lakhs representing an increase of 108.21%.

• Tax Expense

Tax Expense for the Financial Year 31^st March 2025, stood at Rs. 217.11 lakhs out of which Current Tax being Rs.

219.95 lakhs and Deferred Tax being Rs. (2.84) lakhs whereas in the financial year 31^st March 2024 it stood at Rs

92.10 Lakhs out of which Current Tax being Rs. 92.23 and Deferred Tax being Rs. (0.13) represents an increase of 135.73%.

Reason: The tax expenses increased over the financial year due to an increase in profit before tax, therefore tax expenses were made in the financial year 2024-25 as compared to the financial year 2023-24.

• Restated Profit after Tax

The restated profit after tax for the Financial Year 31^st March 2025, stood at Rs. 628.64 Lakhs whereas in Financial Year 31^st March 2024 it stood at Rs. 314.11 Lakhs representing an increase of 100.13%.

(Amount in Lakhs, except %)

Particulars	FY 2024-25	FY 2023-24
Revenue from Operation	8,524.87	6,066.23

Change in %	40.53%
Total Expense	7,716.85	5,677.23
Change in %	35.93%
Profit after tax	628.64	314.11
PAT Margin in %	7.37%	5.18%

Reason: The companys Profit After Tax (PAT) increased from Rs.314.11 lakhs in FY 2023–24 to Rs.628.64 lakhs in FY 2024–25, reflecting a growth of 100.13%. Due to which, PAT margin get improved rising from 5.18% to 7.37% year-over-year.

This improvement is attributed to the following key factors:

• Strong Revenue Growth from High-Margin Contracts:
• Revenue from operations increased by 40.53%, from Rs.6,066.23 lakhs in FY 2023–24 to Rs.8,524.87 lakhs in FY 2024–25.
• A major contributor from a tender awarded by Bharat Electronics Limited (BEL), generating Rs.1,700.00 lakhs in revenue having high margin approx. 18%~22%.
• Additionally, company also received new service orders worth Rs.969.00 lakhs from various clients, at approx. margins 20%~ 25%.
• These high-margin projects played a major role in increasing profitability and driving the significant increase in PAT.

• Controlled Growth in Expenses:
• Although total expenses increased from Rs.5,677.23 lakhs to Rs.7,716.85 lakhs (a rise of 35.93%%), this increase was lower than the growth in revenue and gross profit.
• The company effectively leveraged operating efficiency, ensuring that the rise in costs remained proportionately lower, thereby supporting margin expansion and enhanced net profitability.

FISCAL YEAR ENDED MARCH 31, 2025, COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2024 (BASED ON RESTATED STANDALONE FINANCIAL STATEMENTS)

• Total Income

Total Income for the Financial Year 31^st March 2025, stood at Rs. 8,562.66 Lakhs whereas in Financial Year 31^st March 2024 it stood at Rs 5,465.97 Lakhs representing an increase of 56.65%.

Reasons: The increase in the total income of the company is due to an increase in the revenue and other income of the company.

• Revenue of operations

Net revenue from operations for the Financial Year 31^st March 2025, stood at Rs. 8,524.87 Lakhs whereas in Financial Year 31^st March 2024 it stood at Rs. 5,443.99 Lakhs representing an increase of 56.59%.

Reason: The companys total revenue increased from Rs.5,443.99 lakhs in FY 2023–24 to Rs.8,524.87 lakhs in FY 2024–25. This strong growth was mainly due to a rise in both service income and trading activities during the year.

Service Revenue Growth:

• Income from services increased significantly from Rs.788.54 lakhs in FY 2023–24 to Rs.1,743.69 lakhs in FY 2024–25. This increase was mainly because the company received new service orders from several new customers during the year. These new orders, worth Rs.969.00 lakhs, added to the companys overall revenue. The addition of new clients and higher service volumes helped strengthen the companys position in the service segment.

Trading Revenue Growth:

• Trading sales increased from Rs. 2,895.27 lakhs in FY 2023–24 to Rs. 4,655.45 lakhs in FY 2024–25. A major factor contributing to this growth was a large trading order worth Rs. 3,000.00 lakhs (Rs. 30 crore) received from Bharat Electronics Limited (BEL) in FY 2023. Out of this total order value, the company completed work and raised invoices for Rs. 1,700.00 lakhs during FY 2024–25. In addition, there was an overall increase in the volume of trading transactions during the year, further boosting trading income compared to the previous year.

• In summary, the increase in total revenue was driven by more service orders from new customers and higher trading volumes supported by key contracts during the year.

In summary, the increase in total revenue was driven by more service orders from new customers and higher trading volumes supported by key contracts during the year.

(Amount in Lakhs)

Particulars	FY 2024 - 25	FY – 2023 - 24
Sale of Trading	6,781.18	4,655.45
Sale of services	1,743.69	788.54
Total Revenue	8,524.87	5,443.99

• Other Income

Other Income for the Financial Year 31^st March 2025 stood at Rs. 37.79 Lakhs whereas in the Financial Year 31^st March 2024 it stood at Rs. 21.98 Lakhs represent an increase of 71.89%.

Reason: There is an increase in other income because there was Interest from banks on deposits and interest received on other which was shown as the table below:

(Amount in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Interest from banks on deposits	7.80	5.21
Interest received on other	25.48	-

Expenditure

• Total Expenses

Total Expenses for the Financial Year 31^st March 2025, stood at Rs. 7,701.34 Lakhs whereas in the Financial Year 31^st March 2024 it stood at Rs 5,126.62 Lakhs representing an increase of 50.22%.

Reason: The increase on account of the increase in the cost of service, Purchase of Stock in Trade, Employee benefit expenses, other expenses, financial charges and depreciation and amortization.

• Cost of Sub - Contract technical services

The Cost of Subcontract Technical Services for the Financial Year 31^st March 2025, stood at Rs. 1,519.37 Lakhs whereas in Financial Year 31^st March 2024 it stood at Rs. 486.53 Lakhs representing an increase of 212.29%.

Reason: In FY 2025, the gross profit declined primarily due to a significant increase in the cost of services. Unlike FY 2024, which included high-margin (100%) export service tenders, the services executed in FY 2025 carried much lower margins. The absence of such lucrative contracts, coupled with higher service delivery costs, resulted in a reduced overall gross profit margin for the year.

• Purchase of Stock in Trade

The Purchase of Stock in Trade for the Financial Year 31^st March 2025, stood at Rs. 5445.44 Lakhs whereas in Financial Year 31^st March 2024 it stood at Rs. 4,040.15 Lakhs representing an increase of 34.78%.

Reason. The increase in Purchase of Stock-in-Trade during FY 2024–25 was mainly due to the growth in the companys trading business. Trading sales increase from Rs. 4,655.45 lakhs in FY 2023–24 to Rs. 6,781.18 lakhs in FY 2024–25, showing a significant increase.

• One of the key reasons for this growth was a new trading contract worth Rs. 1,700.00 lakhs received from Bharat Electronics Limited (BEL). To fulfill this large order, the company had to purchase IT products from vendors, which directly increased the stock-in-trade purchases.

• In addition to this, there was a general rise in the overall volume of trading transactions throughout the year. With more client orders and larger trading deals, the company needed to procure more goods to meet the growing demand. As a result, the total Purchase of Stock-in-Trade increased during the year, in line with the rising sales from trading activities.

• Employee benefit expense

The Employee benefit expense for the Financial Year 31^st March 2025, stood at Rs. 248.30 Lakhs whereas in Financial Year 31^st March 2024 it stood at Rs. 226.81 Lakhs representing an increase of 9.48%.

Reason: There was an increase in Employee benefit expenses due to an increase in salaries, wages, bonus and directors remuneration.

(Amounts in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Salaries, Wages & Bonus	83.60	67.45
Directors remuneration	151.95	145.20

• Finance Cost

The Finance Cost for the Financial Year on 31^st March 2025, stood at Rs. 230.00 Lakhs whereas in the Financial Year 31^st March 2025 it stood at Rs. 200.85 Lakhs representing an increase of 14.51% from the previous years.

Reason: The increase in finance costs was primarily due to an increase on interest on loans as company have increased their borrowing.

(Amounts in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Interest on Loans	200.32	152.87
Total Borrowings	2,137.30	1,963.87

• Depreciation and Amortization Expenses

The Depreciation and Amortization Expenses for the Financial Year 31^st March 2025, stood at Rs. 38.91 Lakhs whereas in the Financial Year 31^st March 2024 it stood at Rs. 25.03 Lakhs representing an increase of 55.44%.

Reason: In the financial year 2024–25, depreciation on fixed assets increased primarily due to a higher opening Written Down Value (WDV) compared to the previous year (FY 2023–24). Additionally, the increase in Property, Plant and Equipment (PPE) by Rs.67.39 lakhs during FY 2024–25 also contributed to the higher depreciation expense.

(Amount in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Opening balance	163.74	139.55
Addition	67.39	49.23
Deletion	-	-
Less - Depreciation	38.91	25.03
Closing balance of fixed assets	192.24	163.75

• Other Expenses

The Other Expenses for the Financial Year March 31, 2025, stood at Rs. 219.32 Lakhs whereas in Financial Year 31^st March 2024 it stood at Rs. 147.25 Lakhs representing an increase of 48.94%.

Reason: The increase in "Other Expenses due to substantial rise in Business Promotion Expenses, Insurance Exp, Conveyance & Travelling Expense, Legal & Professional Charges, Repair and maintenance expenses, Rates and taxes and Rent.

(Amounts in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Business promotion Exp.	41.08	4.25
Insurance Expenses	35.47	22.06
Conveyance & Travelling Expense	26.49	15.17
Legal & Professional Charges	35.73	31.23
Rates and taxes	24.18	9.34
Repair & maintenance	11.89	2.11
Rent	24.78	23.60

• Restated Profit before Tax

The restated profit before tax for the Financial Year 31^st March 2025, stood at Rs. 861.32 Lakhs whereas in Financial Year 31^st March 2024 it stood at Rs. 339.35 Lakhs representing an increase of 153.82%.

• Tax Expense

Tax Expense for the Financial Year 31^st March 2025, stood at Rs. 217.11 lakhs out of which Current Tax being Rs.

219.95 lakhs and Deferred Tax being Rs. (2.84) lakhs whereas in the financial year 31^st March 2024 it stood at Rs

90.77 Lakhs out of which Current Tax being Rs. 90.90 and Deferred Tax being Rs. (0.13) represents an increase of 139.20%.

Reason: The tax expenses increased over the financial year due to an increase in profit before tax, therefore tax expenses were made in the financial year 2024-25 as compared to the financial year 2023-24.

• Restated Profit after Tax

The restated profit after tax for the Financial Year 31^st March 2025, stood at Rs. 644.21 Lakhs whereas in Financial Year 31^st March 2024 it stood at Rs. 248.58 Lakhs representing an increase of 159.16%.

Reason:

(Amount in Lakhs)

Particulars	FY 2024-25	FY 2023-24
Revenue from Operation	8,524.87	5,443.99
Change in %	56.59%
Total Expense	7,701.33	5,126.62
Change in %	50.22%
Profit after tax	644.21	248.58
PAT Margin in %	7.56%	4.57%

Justification for increase in PAT:

Reason: The companys Profit After Tax (PAT) increased from Rs.248.58 lakhs in FY 2023–24 to Rs.644.21 lakhs in FY 2024–25, reflecting a growth of 159.16%. Due to which, PAT margin get improved rising from 4.57% to 7.56% year-over-year.

This improvement is attributed to the following key factors:

• Strong Revenue Growth from High-Margin Contracts:
• Revenue from operations increased by 56.59%, from Rs.5,443.99 lakhs in FY 2023–24 to Rs.8,524.87 lakhs in FY 2024–25.
• A major contributor was a tender awarded by Bharat Electronics Limited (BEL), generating Rs.1,700.00 lakhs in revenue at a 22% margin, implying a cost of approximately Rs.1,326.00 lakhs and a gross profit of Rs. 374.00 lakhs from this project alone.
• Additionally, company received new service orders worth Rs.969.00 lakhs from various clients, at margins exceeding 25%. Assuming a 25% margin, the cost is estimated at Rs.726.75 lakhs, resulting in an additional gross profit of Rs.242.25 lakhs.
• These high-margin projects played a major role in increasing profitability and driving the significant increase in PAT.
• Controlled Growth in Expenses:
• Although total expenses increased from Rs.5,126.62 lakhs to Rs.7,701.34 lakhs (a rise of 50.22%), this increase was lower than the growth in revenue and gross profit.

• The company effectively leveraged operating efficiency, ensuring that the rise in costs remained proportionately lower, thereby supporting margin expansion and enhanced net profitability.

FISCAL YEAR ENDED MARCH 31, 2024, COMPARED WITH THE FISCAL YEAR ENDED MARCH 31, 2023 (BASED ON RESTATED STANDALONE FINANCIAL STATEMENTS)

Revenues

• Total Income

Total Income for the Financial Year 31st March 2024, stood at Rs. 5,465.97 Lakhs whereas in Financial Year 31st March 2023, it stood at Rs 3,703.18 Lakhs representing an increase of 47.60%.

Reason: The increase in the total income of the company is due to a significant increase in the revenue of the company and an increase in the other income of the company.

• Revenue of operations

Net revenue from operations for the Financial Year 31^st March 2024, stood at Rs. 5,443.99 Lakhs whereas in Financial Year 31^st March 2023 it stood at Rs. 3,698.90 Lakhs representing an increase of 47.18%.

Reason: In FY 2024, the companys revenue increased strongly, mainly because product sales increased up by 60.80%, rising from Rs. 2,895.27 lakhs to Rs. 4,655.45 lakhs — an increase of Rs. 1,760.18 lakhs compared to the previous year.

These two major projects, along with several other new orders, played a significant role in increasing the

Companys total revenue in FY 2024.

• Larsen & Toubro Limited – Construction Division contributed approximately Rs. 969.78 lakhs to the total revenue.
• KDS Services Pvt. Ltd. contributed approximately Rs. 515.78 lakhs. In addition to these, several other projects collectively contributed substantial amounts, further strengthening the Companys overall revenue performance during the year.

(Amounts in Lakhs)

Particulars	FY 2023-24	FY 2022-23
Sales from IT Product	4,655.45	2,895.27
Sale of Services	788.54	803.63
Total Revenue	5,443.99	3,698.90

• Other Income

Other Income for the Financial Year 31^st March 2024, stood at Rs. 21.98 Lakhs whereas in the Financial Year 31^st March 2023 it stood at Rs. 4.28 Lakhs represent an increase of 413.96%

Reason: The increase in the other income of the company is due to a significant increase in Interest from banks on deposits, Net gain on foreign currency transactions and translation, Interest received on Income tax refund.

(Amounts in Lakhs)

Particulars	FY 2023-24	FY 2022-23
Interest from banks on deposits	5.21	1.82
Net gain on foreign currency transactions and translation	16.31	-

Expenditure

• Total Expenses

Total Expenses for the Financial Year 31^st March 2024, stood at Rs. 5126.62 Lakhs whereas in the Financial Year 31^st March 2023 it stood at Rs 3648.04 Lakhs representing an increase of 40.53%.

Reason: The increase in total expenses on account of the increase in Purchase of Stock in Trade, Employee benefit expenses, depreciation and amortization expenses, finance costs.

• Cost of sub – contract technical services

The Cost of sub – contract technical services for the Financial Year 31^st March 2024, stood at Rs. 486.53 Lakhs whereas in Financial Year 31^st March 2023 it stood at Rs. 721.23 Lakhs representing a decrease of 32.54%.

Reason: The cost of services decreased in FY 2023–24 primarily due to the execution of a high-value consultancy tender amounting to Rs. 200.00 lakhs, which was delivered entirely through in-house resources without incurring any direct external costs. As a result, the transaction contributed a 100% gross margin, significantly reducing the overall cost of services for the year.

In addition, the Company completed an export service project worth Rs. 70.00 lakhs using only its own internal team. Since no outside help or cost involve, the entire amount was earned as profit.

These two high-margin projects, together bringing in Rs.270.00 lakhs with almost no cost, helped reduce the overall

service expenses for the year and improved the Companys profit from services.

• Purchase of Stock in Trade

The Purchase of Stock in Trade for the Financial Year 31^st March 2024, stood at Rs. 4,040.15 Lakhs whereas in Financial Year 31^st March 2023 it stood at Rs. 2,377.28 Lakhs representing an increase of 69.95%.

Reason: The increase in Purchase of Stock-in-Trade during the financial year was mainly driven by the following points.

• Execution of several new and large client orders. To fulfill these orders, the company had to procure a higher volume of IT products and other related items from its vendors.
• A major part of this increase came from a significant order received from Larsen & Toubro Limited – Construction Division, which contributed Rs.969.78 lakhs to the companys revenue. Another key order was from KDS Service Pvt. Ltd., which added Rs. 515.78 lakhs in revenue. Both of these projects required substantial product procurement to meet the specific needs of the clients.
• Since these projects involved the supply of goods, the company had to increase its purchases accordingly. As a result, the Purchase of Stock-in-Trade rose notably compared to the previous year. This rise reflects the companys growing order book and higher demand for its products.

• Change In Inventory

The Change in Inventory for the Financial Year 31^st March 2024, stood at Rs. NIL whereas in Financial Year 31^st March 2023 it stood at Rs. 27.17 Lakhs representing a decrease of 100.00%.

Reason: There is no closing stock in FY 24 as the company sells all its trading stock before the year end, keeping no leftover inventory as the company purchases stock only when an order comes.

• Employee benefit expense

The Employee benefit expense for the Financial Year 31^st March 2024, stood at Rs. 226.81 Lakhs whereas in Financial Year 31^st March 2023 it stood at Rs. 209.75 Lakhs representing an increase of 8.13%

Reason: There was an increase in employee benefit expenses due to an increase in Director Remuneration, Staff Welfare and Gratuity Expenses in FY 2024.

(Amounts in Lakhs)

Particulars	FY 2023-24	FY 2022-23
Directors Remuneration	145.20	133.20
Staff welfare	13.22	8.29
Gratuity Expenses	0.94	0.37

• Finance Cost

The Finance Cost for the Financial Year on 31^st March 2024, stood at Rs. 200.85 Lakhs whereas in the Financial Year 31^st March 2023 it stood at Rs. 132.44 Lakhs represent an increase of 51.65% from the previous years.

Reason: The increase in finance costs was mainly due to interest on loans and bank charges, as the company significantly increased their total borrowing during the years.

(Amounts in Lakhs)

Particulars	FY 2023-24	FY 2022-23
Interest expense on borrowings	152.87	95.69
Other finance processing charges	47.98	36.75
Total Borrowings	1,963.87	979.93

• Depreciation and Amortization Expenses

The Depreciation and Amortization Expenses for the Financial Year 31^st March 2024, stood at Rs. 25.03 Lakhs whereas in the Financial Year 31^st March 2023 it stood at Rs. 19.26 Lakhs representing an increase of 29.99%.

Reason: Despite lower additions, Depreciation and Amortization have increased as Opening Fixed asset balance in FY 24 is higher as compared to FY 23 and also there is no sales made in FY 24 due to which depreciation remained high.

(Amount in Lakhs)

Particulars	FY 2023-24	FY 2022-23
Opening balance	139.55	123.55
Addition	49.23	51.10
Deletion	-	15.84

Less - Depreciation	25.03	19.26
Closing balance of fixed assets	163.75	139.55

• Other Expenses

The Other Expenses for the Financial Year March 31, 2024, stood at Rs. 147.25 Lakhs whereas in Financial Year 31^st March 2023 it stood at Rs. 160.91 Lakhs representing a decrease of 8.49%.

Reason: The decrease in "Other Expenses" can be attributed primarily to a significant decrease in Conveyance & Travelling Expense, Insurance, Legal & Professional Charges, Repair & maintenance and also there is no Net loss on foreign currency transactions and translation in the that year.

The details of these expenses are mentioned below:

(Amounts in Lakhs)

Particulars	FY 2023-24	FY 2022-23
Conveyance & travelling expense	15.17	25.93
Insurance	22.06	24.23
Legal & professional charges	31.23	39.41
Net loss on foreign currency transactions	-	9.70
Repair & maintenance	2.11	6.10

• Restated Profit before Tax

The restated profit before tax for the Financial Year 31^st March 2024, stood at Rs. 339.35 Lakhs whereas in Financial Year 31^st March 2023 it stood at Rs. 55.14 Lakhs representing an increase of 515.39%.

• Tax Expense

Tax Expense for the Financial Year 31^st March 2024, stood at Rs. 90.77 lakhs out of which Current Tax being Rs.

90.90 lakhs and Deferred Tax being Rs. (0.13) Lakhs whereas in financial year 31^st March 2023 it stood at Rs 14.89 Lakhs out of which Current Tax being Rs. 14.63 lakhs and Deferred Tax being Rs. 0.26 Lakhs representing as increase of 509.66%.

Reason: The tax expenses increased over the financial year due to an increase in profit before tax, therefore more tax expenses were made in the financial year 2023-24 as compared to the financial year 2022-23.

• Restated Profit after Tax

The restated profit after tax for the Financial Year 31^st March 2024, stood at Rs. 248.58 Lakhs whereas in Financial Year 31^st March 2023 it stood at Rs. 40.25 Lakhs representing an increase of 517.78%.

(Amount in Lakhs)

Particulars	FY 2023-24	FY 2022-23
Revenue from Operation	5,443.99	3,698.90
Change in %	47.18%
Total Expense	5,126.62	3,648.04
Change in %	40.53%
Profit after tax	248.58	40.25
Pat Margin in %	4.57%	1.09%

Reason: The restated Profit After Tax (PAT) for the financial year ended 31st March 2024 stood at Rs.248.58 lakhs, compared to Rs.40.25 lakhs in the previous year (FY 2022–23), representing an increase of 517.66%. As a result, Company PAT margin improved significantly from 1.09% in FY 2022–23 to 4.57% in FY 2023–24, reflecting stronger profitability and improved operational efficiency.

Justification for the Increase in PAT:

• High-Margin Revenue from Export Services and In-House Consultancy services
• In FY 2023–24, the company generated Rs.270.00 lakhs in service revenue, a significant portion of which came from two clients.
• The company earned Rs. 200 lakhs from an in-house consultancy project, where all the work was done using its own employees and existing resources. There were no outside expenses involved in completing this project.

• In addition, the company earned Rs. 70.00 lakhs from an export service project, which was also completed fully by the internal team without hiring any external services or buying extra materials.

• Because both projects were done using only internal resources, there were no extra costs. This means the full Rs. 270.00 lakhs earned from these two projects was profit. Since these earnings added directly to the companys profit without reducing it through costs, they helped increase the companys overall profit after tax (PAT) and improved the profit margin for the year.

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

• 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.

• 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.

• 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 Managements Discussion and Analysis of Financial Condition and Results of Operations on pages 32 and 254, 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.

• Income and Sales on account of major product/main activities:

Income and sales of our Company on account of major activities derives from the Information and Technology Sector.

• Future changes in relationship between costs and revenues, in case of events such as future increase in marketing or advertisement costs or prices that will cause a material change are known:

Our Companys future costs and revenues may be indirectly affected by rising cost of raw material.

• Future relationship between Costs and Income

Our Companys future costs and revenues will be determined by competition, demand/supply situation, Indian Government Policies.

• 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.

• Total turnover of each major industry segment in which the issuer company operates

The Company operates in the IT Industry. Relevant industry data, as available, has been included in the chapter titled "Our Industry" beginning on page 123 of this Draft Red Herring Prospectus.

• Status of any publicly announced new products or business segments:

Our Company has not announced any new services and product and segment / scheme, other than disclosure in this Draft Red Herring Prospectus.

• The extent to which the business is seasonal:

Our business does not depend to a certain extent on the seasonal, environmental and climate changes. However, our business is subject to environmental factors, particularly monsoon season in each fiscal year can impede our operations and projects.

• 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 157 of this Draft Red Herring Prospectus.