R Systems International Ltd Management Discussions

Overview

The consolidated financial statements of the Group have been prepared in accordance with the Indian Accounting Standards (Ind-AS) prescribed under Section 133 of the Companies Act, 2013, read with Companies (Indian Accounting Standard) Rules as amended from time to time. The estimates and judgments relating to the financial statements have been made on a prudent and reasonable basis so that the financial statements reflect in a true and fair manner the form and substance of transactions and reasonably present the state of affairs, profits, and cash flows for the year.

A. Industry Structure and Developments

The IT services industry closed 2025 in a noticeably different posture than it began the year. 2024 had carried AI excitement. 2025 became the year of proof-of-concept and use-case experiments, where enterprises and ISVs deployed AI tools across the software development lifecycle and business workflows to test what individual productivity gains actually looked like at the engineering desk. Through that experimentation, a clear pattern surfaced. Individual engineers measurably worked faster on AI-assisted tasks, while team- level velocity, cycle times, and portfolio throughput largely stayed flat. The question that enterprises started putting to their technology partners shifted accordingly, from whether AI could be used to why AI investments were not yet producing measured, governed outcomes at the team and organizational level.

That shift sat at the center of the technology services agenda for the year. Industry analysts, including Gartner, projected that close to half of agentic AI initiatives could be abandoned by 2027 if expectations, operating costs, and governance gaps were not addressed in tandem. Enterprises and ISVs began speaking openly about tooling fatigue, uneven AI proficiency across teams, ambiguity around intellectual property and data handling, and security or audit gaps that had been bolted on to AI workflows rather than designed into them. Each of those issues pointed to the same root. AI usage at the individual level had outpaced the organizations capacity to operate AI as a governed, measurable, repeatable system. Cloud, cybersecurity, platform engineering, and data engineering continued to expand as foundational layers, but the conversation in which they sat had matured.

Six demand patterns shaped the digital product engineering and IT services market throughout the year. Agentic AI moved from concept to production deployment, where multi-agent orchestration, observability, and human-in-the- loop governance became the deciding capabilities. Legacy modernization regained importance as enterprises started preparing their estates to be AI-ready, with code, data, and analytics layers each requiring structural rebuilds. Platform engineering and SDLC automation expanded as the highest- return early use cases. Domain-specific data assets, including AI-grade data engineering and context fabrics, moved from

optional to essential. Verticalized AI applications gained traction in regulated industries. And cost engineering of AI workloads became a board-level discussion as token economics began to show up in CFO conversations.

The Group serves clients across five industry verticals through these shifts: Tech, Internet, Platforms and Services; Healthcare; Manufacturing & Logistics ; Telecom, Media, and Entertainment; Banking, Financial Services, and Insurance. Demand patterns were not uniform across these domains, but they shared a consistent question. ISVs and platform companies are rebuilding parts of their products with AI as a first-class capability rather than a feature add-on. Healthcare clients are navigating clinical AI, revenue cycle automation, and HIPAA- aligned governance simultaneously. Manufacturing, logistics, and automotive clients are connecting plant-floor data, predictive operations, and supply chain intelligence into unified decision layers. Telecom, media, and entertainment continued to invest in network optimization, content engineering, and customer experience platforms. Banking, financial services, and insurance carried the heaviest regulatory load, and paced AI deployment to match audit and compliance expectations. Services and Public Services emerged as faster-growing pockets, with workflow automation and citizen-facing platforms drawing investment that did not exist at this scale a year earlier.

B. Company Overview

R Systems International Limited (the Company or the Parent Company) and its subsidiaries (hereinafter collectively referred to as the Group) are a public company domiciled in India, having its registered office at New Delhi. Its equity shares are listed on the National Stock Exchange of India Limited and debentures on BSE Limited. The Group is a leading global provider of technology, artificial intelligence, intelligent process automation services, and solutions, along with knowledge services. The Group delivers its services and solutions to leading technology companies and businesses to enable their digital transformation.

The Company has the following subsidiaries:-

Name	Holding as at		Country of incorporation and other particulars
	December 31, 2025	December 31, 2024
R Systems, Inc., USA	100%	100%	A company registered under the laws of California, USA in 1993 and subsidiary of the Company since January 2, 2001.
R Systems (Singapore) Pte Limited, Singapore	100%	100%	A company registered under the laws of Singapore in 1997 and subsidiary of the Company since September 19, 2000.
R Systems Technologies Limited, USA	100%	100%	A company registered under the laws of Delaware, USA in 1996 and subsidiary of the Company since April 1, 2002.
R Systems Consulting Services Limited Singapore	99.75%	99.75%	A company registered under the laws of Singapore in 1996. The Company has acquired majority share on January 8, 2004. R Systems Consulting Services Limited, Singapore has subsidiaries in Malaysia, Thailand,China,Hong Kong Japan and Vietnam. The shareholding by the Company and R Systems (Singapore) Pte Limited is 69.37% and 30.38% respectively.
R Systems Computaris International Limited, UK	100%	100%	A company registered under the laws of U.K in 2006. The Company has acquired the entire share on January 26, 2011. R Systems Computaris International Limited, U.K. has subsidiaries in Romania, Poland, Moldova, Malaysia, Switzerland and Philippines.
RSYS Technologies Ltd., Canada	100%	100%	A company registered under the laws of Canada in 2012 and subsidiary of the Company since October 29, 2012.
Velotio Technologies Private Limited (\u201c Velotio \u201d) (refer to Note below)	100% outstanding equity capital	100% outstanding equity capital	A private company registered under the Companies Act, 2013 in 2016 and the subsidiary of the Company since July 3, 2023.
RSIL Mexico, S. de R.L. de C.V.	100%	100%	A company registered under the laws of United Mexican States in 2024 and subsidiary of the Company since October 9, 2024.
Novigo Solutions Private Limited India	100% outstanding equity capital	-	A private company registered under the Companies Act, 2013 in 2013 and subsidiary of the Company since November 13, 2025.

Note:

As of December 31, 2025, and December 31, 2024, Scaleworx Technologies Private Limited (Scaleworx) is the wholly owned subsidiary of Velotio.

Subsequent to the year ended December 31, 2025, pursuant to the Order effective from May 01, 2026, Velotio and Scaleworx stand merged with the Company and have accordingly ceased to be its subsidiaries.

R Systems Consulting Services Limited, Singapore, has the following wholly owned subsidiaries:

Name	Holding as at		Country of incorporation
	December 31, 2025	December 31, 2024
R Systems Consulting Services (M) Sdn. Bhd.	100 %	100 %	Malaysia
R Systems Consulting Services (Thailand) Co., Ltd.	100 %	100 %	Thailand
R Systems Consulting Services (Shanghai) Co., Ltd.	100 %	100 %	People\u2019s Republic of China
R Systems Consulting Services (Hong Kong) Limited.	100 %	100 %	Hong Kong (Special Administrative Region)
R Systems Consulting Services Kabushiki Kaisha	100 %	100 %	Japan
R Systems Consulting Services Company Limited (incorporated on October 17, 2022)	100 %	100 %	Vietnam

Annexure D to the Boards Report

R Systems Computaris International Limited, UK, has the following wholly owned subsidiaries:

Name	Holding as at		Country of incorporation
	December 31, 2025	December 31, 2024
R Systems Computaris Europe SRL	100 %	100 %	Romania
R Systems Computaris Poland sp z o.o	100 %	100 %	Poland
R Systems Computaris S.R.L	100 %	100 %	Moldova
R Systems Computaris Malaysia Sdn. Bhd.	100 %	100 %	Malaysia
R Systems Computaris Philippines Pte. Ltd. Inc.	100 %	100 %	Philippines
R Systems Computaris Suisse Sarl	100 %	100 %	Switzerland

R Systems IBIZCS Pte. Ltd., Singapore, is a wholly owned subsidiary of R Systems (Singapore) Pte Limited, Singapore w.e.f. April 30, 2015, and has the following wholly owned subsidiaries:

Name	Holding as at		Country of incorporation
	December 31, 2025	December 31, 2024
IBIZ Consulting Services Pte Ltd., Singapore (strike off w.e.f. January 08, 2024)	-	-	Singapore
R Systems IBIZ Sdn. Bhd.	100 %	100 %	Malaysia
PT. R Systems IBIZCS International	100 %	100 %	Indonesia
IBIZ Consulting (Thailand) Co. Ltd.	100 %	100 %	Thailand
IBIZ Consulting Service Limited (IBIZ HK)	100 %	100 %	Hong Kong (Special Administrative Region)
IBIZ Consulting Service Shanghai Co., Ltd	100% by IBIZ HK	100% by IBIZ HK	People\u2019s Republic of China

Novigo Solutions Private Limited is a subsidiary of R Systems International Limited w.e.f. November 13, 2025, and has the following wholly owned subsidiaries:

Name	Holding as at December 31, 2025	Country of incorporation
Novigo Solutions Inc	100 %	United States of America
Novigo for Information Technology	100 %	Kingdom of Saudi Arabia
Novigo Solutions B.V.	100 %	Netherlands
Novigo Solutions Limited	100 %	United Kingdom

C. Opportunities and Threats

The conditions through 2025 created a clearer commercial opening for partners that had built the engineering depth, governance architecture, and proficient talent base required to deliver AI in production rather than only in pilot. Enterprises and ISVs that had spent the year on tools alone became actively interested in working with partners who could close the gap between individual productivity and team-level, governed outcomes. R Systems entered FY 2026 with the offering, the proof points, and the institutional capability needed to address that demand at scale.

The clearest opportunity sits at four customer archetypes that span the Groups verticals. ISVs that built their products before the current generation of AI are looking to rebuild parts of their offerings with AI as a primary capability, which calls

for both modernization and AI-native engineering. Vertical software companies with deep domain models, particularly in healthcare, legal, retail, and clinical workflows, are layering fine- tuned models and context engineering on top of their existing data assets. Among large enterprises running heavy systems of record, the demand has shifted toward agentic workflows that orchestrate across claims, revenue cycle management, IT service management, and human resources without disturbing the underlying data layer. The fastest-growing pocket is AI-native startups and scale-ups that need to move from prototype to scale at speed, which is where reusable agent frameworks and OptimaAI accelerators provide direct commercial leverage. The Novigo acquisition, completed in November 2025, strengthened the Groups agentic AI delivery capability and added Mangaluru as a developing center of agentic engineering talent. The Groups integrated AI delivery

capability, combining OptimaAl as the agentic platform with the AIEV-certified practitioner bench and a structured five-phase execution methodology, took shape throughout the year as a packaged, repeatable way to move clients from assessment to production, typically within ninety days.

The threat landscape is real and is managed actively. Talent retention in AI-skilled roles remains competitive, with a small global pool of practitioners commanding strong compensation across geographies. Cybersecurity exposure expands as AI agents extend their reach into client systems, and the governance burden, including agent observability, role- based access control, and prompt-injection protection, falls on the partner as much as on the client. Geopolitical and trade-policy shifts can affect demand cycles and project economics in specific corridors. Customer concentration, hyperscaler dependency, and exchange-rate fluctuations carry their usual industry-level risks. The agentic AI hype cycle itself is a double-edged factor for the year ahead. A partner who cannot demonstrate production-grade outcomes, with measurable engineering velocity and governed deployments, risks being grouped with the half of agentic projects that industry analysts expect to be abandoned over the next two years. Separately, the Government of Indias notification of the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020 (collectively, the "Labor Codes") in November 2025 marks a structural shift in employment-cost economics for the Indian IT industry. The Group has assessed and recognized the financial implications during the year as set out in Section E.

These risks are managed through the Groups proficiency- driven talent framework, governance-first platform architecture, vertical and geographic diversification, and disciplined commercial structuring. The Risk Management Report covers the full set of identified risks and the Groups response to each.

D. Segment-wise and Product-wise Performance

Detailed information about segment-wise and product-wise performance has been given in the Consolidated Financial Statements and Standalone Financial Statements.

E. Performance and Outlook

R Systems reported consolidated revenue of Rs. 19,582.06 million during the year 2025, against revenue of Rs. 17,417.27 million during the year 2024. Revenue grew by 12.4% during the year, driven by continued demand across the Groups five verticals and contribution from the Novigo acquisition completed in November 2025.

Consolidated profit after tax for the year 2025 was Rs. 1,861.96 million, against Rs. 1,311.82 million for 2024. The increase in net profit reflects the gain on sale of land, building, and certain other assets located at the Companys NOIDA office, partially offset by an increase in employee benefit obligations arising from past services. The latter relates to the Government of Indias notification of the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020 in November 2025 (collectively, the "Labour Codes"), and the Group has recognised an incremental obligation of Rs. 245.83 million on a consolidated basis (Rs. 242.61 million on a standalone basis) under Exceptional Items, given the nonrecurring nature of the change.

Basic earnings per share on the consolidated financial statements for the year 2025 were Rs. 15.73, against Rs. 11.09 in 2024, on a face value of Re. 1 each.

R Systems maintains a solid financial position, with equity attributable to equity shareholders of Rs. 7,916.23 million and net cash and bank balance of Rs. 3,141.13 million as of December 31, 2025, available to fund the Groups growth plans and continued investment in talent, platform, and acquisitions.

R Systems is well-positioned to continue its growth trajectory through FY 2026 on the strength of the following differentiated factors:

AI-first execution capability anchored in OptimaAI, the Groups enterprise-grade agentic AI platform, with more than 150 domain-agnostic agents, 18 industry blueprints, agent templates, and AI-native accelerators that move clients from assessment to production typically within ninety days

A proficiency-driven AI talent base of more than 1,400 practitioners certified across the four-level AIEV framework (Aspirant, Beginner, Builder, Champion), with progression based on evidence of merged pull requests, deployments, and coaching contributions rather than self-reported credentials

A five-layer AI value framework for digital product engineering that integrates governance and foundation models, connectors and integrations, prompts and evaluations, industry value chains, and customer insight, allowing AI to be deployed as a governed system rather than as point tools

Recognition by Everest Group as a Leader in the

2025 PEAK Matrix Assessment for Software Product

Engineering Services for Mid-market Enterprises, alongside Major Contender positions in adjacent assessments

Vertical depth across Tech, Internet, Platforms and

Services;Healthcare;Manufacturing, Logistics, and Automotive; Telecom, Media, and Entertainment;

Banking, Financial Services, and Insurance with strategic concentration in TIPS, Healthcare, and TME

Long-term relationships with marquee customers,

including Fortune 500 enterprises and 45-plus portfolio companies of leading private equity firms, including Blackstone, KKR, Thoma Bravo, K1, and TPG

Strengthened agentic AI delivery capability through the November 2025 acquisition of Novigo Solutions, with Mangaluru emerging as a developing center of agentic engineering talent

Global delivery footprint across 22 development and service centers covering North America, Europe, India, ASEAN, Greater China, Japan, the Middle East, and Latin America

Adherence to enterprise-grade quality, security, and compliance certifications, including ISO 9001:2015, ISO 27001:2022, CMMIDEV/5, HITRUST, PCI DSS (ver. 4.0), and SOC 2 Type 2

A strong balance sheet to support liquidity, ongoing investment, and inorganic growth opportunities

Annexure D to the Boards Report

The demand environment entering 2026 has shifted from AI experimentation toward AI implementation, where measured engineering velocity, governance, and outcomes at the team and portfolio level have become the basis on which partner decisions are made. R Systems combination of OptimaAI, the AIEV-certified practitioner bench, and the structured five- phase delivery methodology positions the Group to meet that demand with proof rather than promise. Subsequent to the year-end, the Group has brought these capabilities together under EXIQO, the AI studio launched by R Systems in 2026, providing a unified, market-facing offering aligned to where enterprises and ISVs are headed in their AI journey.

F. Risk and Concerns

At R Systems, risk management is a dynamic process with an attempt to constantly identify all the emerging risks and propose solutions to manage them meticulously. This is further explained in detail in the Risk Management Report.

G. Internal Control Systems and Their Adequacy

Internal control systems are a set of policies, processes, and procedures put in place to help achieve the strategic objectives of an organization. The Companys Internal Control System is commensurate with the size, scale, and complexity of its operations. It has been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use, executing transactions with proper authorization, and ensuring compliance with corporate policies. In addition, the Company has identified and documented the key risks and

controls for each process that has a relationship to the financial operations and reporting. Internal teams test identified vital controls at regular intervals to ensure their existence and operating effectiveness. Further, the internal auditors also perform an independent check of the effectiveness of key controls in identified areas of internal financial control reporting. The Statutory Auditors Report also includes an unmodified opinion on the adequacy and operating effectiveness of the Companys internal financial controls over financial reporting.

The CEO/CFO certification provided in this report places responsibility on the CEO and CFO to continuously ensure the adequacy of the Companys internal control systems and procedures.

H. Material Development in Human Resources / Industrial Relations Front, including the Number of People Employed

At R Systems, we identify our associates as our most valued assets, and we recognize their commitment to the growth journey of our organization. It is critical to attract, develop, deploy, and retain talent in the IT and ITES industry. Therefore, R Systems has also defined and implemented a people management initiative, in line with the industry best practices and the People Capability Maturity Model (People CMM). It effectively manages the life cycle to ensure that individuals are committed to the broader organizational goals and show proactiveness at the workplace.

As at December 31, 2025, R Systems has a talent pool of 5,359 associates, including 581 sales and support associates.

I. Discussion on financial performance with respect to operational performance.

Financial Position as of December 31, 2025

1. Property, Plant and Equipment (PPE), Right-of-Use Assets (ROU), and Intangible Assets

PPE includes building, leasehold improvement, computer hardware, furniture & fittings, vehicle, office, and electrical equipment. ROU includes land, building, computer hardware, computer software, vehicle, and furniture & fittings. Intangible assets include Goodwill on consolidation, computer software, non-compete, and customer contracts.

(Rs. in million)

Particulars	Consolidated		Standalone
	December 31, 2025	December 31, 2024	December 31, 2025	December 31, 2024
Property, plant and equipment	673.67	436.83	481.31	309.52
Right-to-use assets	736.56	495.85	516.88	403.12
Capital work in progress	1.34	-	-	-
Goodwill	6,956.74	2,836.24	-	-
Other intangible assets	2,867.35	1,923.55	57.35	2.56
Intangible assets under development	-	40.53	-	40.53
Total	11,235.66	5,733.00	1,055.54	755.73

Particulars	Consolidated		Standalone
	December 31, 2025	December 31, 2024	December 31, 2025	December 31, 2024
Property, plant and equipment	536.20	153.65	323.75	101.12
Right-to-use assets	402.99	32.91	186.42	-
Other intangible assets	1,233.45	0.04	65.62	-
Goodwill	4,104.56	-	-	-

Note: Refer to the Consolidated Financial Statement and Standalone Financial Statement for head-wise details.

Details of total additions in the consolidated financial statement through acquisition during the year ended December 31, 2025, are as follows:

(Rs. in million)

Particulars	Consolidated
	Gross Block	Net Block
Property, plant and equipment	128.78	50.07
Right-to-use assets	126.37	105.16
Other intangible assets	1,149.42	1,149.42
Goodwill	4,104.56	4,104.56

Note: For details, please refer to Note no. 35 Consolidated Financial Statement.

2. Investment Property

Investment Property represents the land and building in Pune, which have been given on lease. Investment Property value (net) as of December 31, 2025, was Rs. 12.99 million as against Rs. 14.47 million as of December 31, 2024.

3. Non-Current Investment

(Rs. in million)

Particulars	Consolidated		Standalone
	December 31, 2025	December 31, 2024	December 31, 2025	December 31, 2024
Investment in subsidiaries (net of provision for diminution in the value of investment)	-	-	7,752.45	3,735.19
Other investment	0.03	0.03	0.03	0.03
Total	0.03	0.03	7,752.48	3,735.22

Increase in investment in subsidiaries represents further investment in RSIL Mexico, S. de R.L. de C.V., and the amount paid with respect to the acquisition of Novigo Solutions Private Limited.

Note: Please refer to Note no. 4, Standalone Financial Statement.

4. Other Non-Current Financial Assets (r s . i n m iiii on )

Particulars	Consolidated		Standalone
	December 31, 2025	December 31, 2024	December 31, 2025	December 31, 2024
Security deposits	55.73	25.67	40.65	19.78
Margin money deposits	32.69	32.24	0.64	0.60
Interest accrued on fixed deposits	0.17	0.13	0.01	0.02
Staff advance	0.05	0.17	0.06	0.17
Bank deposits to be matured after 12 months	0.30	-	-	-
Recoverable from subsidiaries towards RSU	-	-	77.63	-
Total	88.94	58.21	118.99	20.57

Deferred tax reflects the timing differences between the financials and tax books arising mainly from employees benefit provisions, difference in book values and tax base values of depreciable assets, right-of-use assets and lease liabilities, Provision for doubtful debts, tax losses, M2M loss on derivative instruments (results in deferred tax assets), differences between accounting base and tax base Non-convertible debenture and M2M gain on derivative instruments (results into deferred tax liability).

Deferred tax assets and deferred tax liabilities across various tax jurisdictions, which cannot offset against each other, are presented separately.

(Rs. in million)
	Consolidated		Standalone
Particulars	December 31,	December 31,	December 31,	December 31,
	2025	2024	2025	2024
Deferred Tax Assets	608.47	392.01	361.56	276.72
Deferred Tax Liability	0.17	-	-	-

6. Income Tax Assets/Liability

Income tax assets represent the excess of tax paid over liability. It has been classified as non-current tax assets in the financial statement. Income tax liability represents the excess of tax liability over advance tax. It has been classified as current tax liability in a financial statement, as the Company is required to settle the same within 12 months from the reporting date.

(Rs. in million)

Particulars	Consolidated		Standalone
	December 31, 2025	December 31, 2024	December 31, 2025	December 31, 2024
Income tax assets (net)	81.41	45.59	18.06	19.21
Income tax liability (net)	172.06	184.81	85.97	153.78

Income tax assets/liabilities across various tax jurisdictions that cannot offset against each other are presented separately.

7. Other Non-Current Assets

(Rs. in million)

	Consolidated		Standalone
Particulars	December 31, 2025	December 31, 2024	December 31, 2025	December 31, 2024
Prepaid expenses	40.74	37.91	29.45	37.22
Total	40.74	37.91	29.45	37.22

8. Trade Receivables

(Rs. in million)

Particulars	Consolidated		Standalone
	December 31, 2025	December 31, 2024	December 31, 2025	December 31, 2024
Trade receivables (gross)	4,378.30	2,649.35	2,066.02	1,136.95
Less: Allowance for doubtful debts (expected credit loss allowance)	271.69	76.26	94.06	40.86
Trade receivables (net)	4,106.61	2,573.09	1,971.96	1,096.09

9. Cash and Bank Balance

(Rs. in million)

Particulars	Consolidated		Standalone
	December 31, 2025	December 31, 2024	December 31, 2025	December 31, 2024
Cash and cash equivalents
Cash on hand	1.47	1.01	0.08	0.14
Balances with scheduled banks	784.00	499.46	232.87	213.86
Balances with other banks	2,299.02	1,400.42	322.72	173.15
Cash and cash equivalents (A)	3,084.49	1,900.89	555.67	387.15
Other bank balances
Deposit with an original maturity of more than 3 months but less than 12 months	51.25	32.87	-	2.36
Balances in unclaimed dividend account	5.39	3.70	5.39	3.70
Other bank balances (B)	56.64	36.57	5.39	6.06
Total Cash and Bank Balance (A+B)	3,141.13	1,937.46	561.06	393.21

Note: For detailed movement in cash and cash equivalent, please refer to the Consolidated and Standalone statement of cash flow.

10. Other Current Financial Assets

(Rs. in million)

Particulars	Consolidated		Standalone
	December 31, 2025	December 31, 2024	December 31, 2025	December 31, 2024
Staff advance	18.28	8.29	0.88	1.57
Recoverable from related parties	-	-	8.52	50.03
Unbilled revenue other than from fixed bid contract	793.96	697.05	404.09	583.97
Securities deposit	18.76	30.53	0.71	11.35
Bank deposits with original maturity of more than 12 months	-	47.47	2.51	-
Interest accrued on bank deposits	2.13	2.40	-	-
Other	37.12	11.92	4.23	2.91
Total	870.25	797.66	420.94	649.83

Unbilled revenue constitutes amounts that are not billed to customers at year-end, which is expected to be billed in due course in accordance with the contract with the respective customers.

11. Other Current Assets

(Rs. in million)

Particulars	Consolidated		Standalone
	December 31, 2025	December 31, 2024	December 31, 2025	December 31, 2024
Balances with indirect tax authorities	164.55	142.14	96.46	107.09
Unbilled revenue from fixed bid contract	367.20	126.23	134.40	22.35
Prepaid expenses	276.28	224.31	168.02	148.28
Advance to vendors	26.39	7.85	9.72	6.81
Tour and travel advance	1.20	1.83	1.20	1.83
Total	835.62	502.36	409.80	286.36

12. Share Capital

a. The Companys authorised share capital is Rs. 206 million as of December 31, 2025, and December 31, 2024. The Companys issued, subscribed and paid-up capital as of December 31, 2025, and December 31, 2024, is Rs.118.40 million and Rs.118.31 million respectively.

b. The Board of Directors at its meeting held on May 8, 2025 had declared an interim dividend of Rs. 6.00/- per equity share of face value of Re. 1/- each aggregating to Rs. 710.28 million.

Detailed information about the movements in share capital and RSUs has been given in Note no. 11 of notes to the Consolidated

Financial Statements.

13 Other Equity

(Rs. in million)

Particulars	Consolidated		Standalone
	December 31, 2025	December 31, 2024	December 31, 2025	December 31, 2024
Reserve and Surplus
Share application money pending allotment	.03	-	.03	-
Securities premium account	51.44	-	51.44	-
Capital reserve under common control	(0.34)	(0.34)	(0.34)	(0.34)
Capital reserve other	0.03	0.03	-	-
Capital redemption reserve	5.02	5.02	5.02	5.02
Share based payment reserve	505.30	298.86	505.29	298.86
Retained earnings	6,354.82	5,210.72	6,222.75	4,709.94
Other Comprehensive Income
Foreign currency translation reserve	881.53	607.90	-	-
Total Other Equity	7,797.83	6,122.19	6,784.19	5,013.48

14. Non-Controlling Interest

Non-controlling interest as of December 31, 2025 and December 31, 2024 is Rs. 4,330.88 and Rs. 2,407.00 respectively.

Detailed information regarding the increase in the non-controlling interest has been given in Note no. 35 of notes to the Consolidated Financial Statements.

15. Borrowings (Non-Current and Current)

(Rs. in million)

	December 31, 2025	December 31, 2024
Term loans -Motor vehicles Loan from non-banking financial company (secured)
Non-Current Portion	15.84	13.01
Current Portion	11.42	11.46
Non-convertible debentures	2,695.91	-
Cash credit facility from scheduled banks	442.97	52.86
Total Borrowings	3,146.14	77.33

During the year, the Company issued 27,500 listed, rated, unsecured, senior, redeemable, non-convertible debentures ("NCDs") of the face value of Rs.1 Lakh each, aggregating to Rs.2,750.00 million @9.75% p.a. through private placement which were allotted on November 11, 2025. The interest is payable quarterly, and first interest payment was made by the due date of December 31, 2025. The NCDs are repayable in equal semi-annual installments of Rs.458.33million commencing from the end of the 30th month from the date of allotment. The NCDs are listed on BSE Limited. The proceeds of NCDs were utilized for the part payment of the acquisition of 100% equity shares of Novigo Solutions Private Limited. The NCDs were recognised net of transaction cost of Rs. 76.20 million.

Particulars	Consolidated		Standalone
	December 31, 2025	December 31, 2024	December 31, 2025	December 31, 2024
Non-current	788.60	561.28	620.97	528.63
Current	163.09	90.21	70.23	26.24
Total Lease liabilities	951.69	651.49	691.20	554.87

17. Other Non-Current Financial Liabilities

Other Non-Current Financial Liabilities represent the Security deposits received which is required to be paid after the 12 months form the reporting date based on contractual agreement. Security deposit as of December 31, 2025, was Rs. 15.28 mn as against of Rs. 12.18 mn as of December 31, 2024.

18 . Provisions (Non-Current) (Rs. in million)

Particulars	Consolidated		Standalone
	December 31, 2025	December 31, 2024	December 31, 2025	December 31, 2024
Provision for Employee benefit - Gratuity	576.39	327.63	483.11	275.19

19. Trade Payables

(Rs. in million)

	Consolidated		Standalone
Particulars	December 31, 2025	December 31, 2024	December 31, 2025	December 31, 2024
Trade Payable	1,141.22	406.23	230.78	97.92

During the year ended December 31, 2025 increase in trade payables on account of acquisition of Novigo Solutions Private Limited by Rs. 412.49 million.

20. Other Current Financial Liabilities

(Rs. in million)

Particulars	December 31, 2025	December 31, 2024	December 31, 2025	December 31, 2024
Payable to subsidiary company	-	-	7.37	81.57
Security deposits received	15.08	13.37	15.08	13.37
Unclaimed dividend	5.39	3.70	5.39	3.70
Mark-to-market loss on derivative instruments	82.77	55.45	82.77	55.45
Employee benefits payable	1,210.08	812.61	491.63	383.68
Capital creditors	31.05	0.71	31.05	0.71
Advance from Customers	8.56	14.46	3.63	11.93
Interest accrued but not due	1.81	0.39	1.81	0.39
Other financial liabilities	11.48	7.73	3.35	3.31
Total	1,366.22	908.42	642.08	554.11

21. Other Current Liabilities

(Rs. in million)

Particulars	Consolidated		Standalone
	December 31, 2025	December 31, 2024	December 31, 2025	December 31, 2024
Other statutory dues payable	301.56	237.78	102.01	101.62
Unearned revenues	547.02	249.21	34.39	49.03
Advance received towards sale of assets	-	70.00	-	70.00
Total	848.58	556.99	136.40	220.65
Particulars	Consolidated		Standalone
	December 31, 2025	December 31, 2024	December 31, 2025	December 31, 2024
Provision for employee benefits
-Gratuity	93.36	43.28	81.32	35.60
-Compensated absences	458.82	339.52	297.96	235.21
Provision for CSR	4.81	0.41	-	-
Total	556.99	383.21	379.28	270.81

23. Liquidity

The consolidated cash and cash equivalents as at December 31, 2025 were Rs. 3,084.49 mn as against Rs. 1,900.89 mn as on December 31, 2024.

Net cash generated from operating activities was Rs. 2,198.69 mn for the year ended December 31, 2025 compared to Rs. 2,352.65 mn for the year ended December 31, 2024.

Cash used in investing activities was Rs. 3,260.54 mn for the year ended December 31, 2025, and mainly comprised of payment towards Acquisition of subsidiary was Rs.3,282.48 mn payment on account of purchase of fixed assets was Rs. 440 mn as offset by proceeds from sale of property, plant and equipment amounting to Rs. 373.07 mn.

Cash generated from financing activities was Rs. 2,090.43 mn for the year ended December 31, 2025, and mainly comprised of proceeds from Non-Convertible Debenture was Rs. 2,673.80 mn as offset by payment of interim dividend amounting to Rs. 710.28 mn.

R Systems policy is to maintain sufficient liquidity to fund the anticipated capital expenditures, operational expenses and investments for strategic initiatives.

Analysis and Discussions of Operating Performance for the Year Ended December 31, 2025

The following section discusses in detail the composition of different items in the Consolidated and Standalone Statement of Profit and Loss Account.

Consolidated Statement of Profit and Loss for the year:

(Rs. in million)

Particulars	Year ended December 31, 2025	% of Total Income	Year ended December 31, 2024	% of Total Income	Change %
Income
Revenue from operations	19,582.06	97.34	17,417.27	99.52	12.43
Other income	536.12	2.66	83.14	0.48	544.84
Total income	20,118.18	100.00	17,500.41	100.00	14.96
Expenses
Employee benefits expense	12,872.69	63.99	11,911.19	68.06	8.07
Finance costs	141.74	0.70	83.95	0.48	68.84
Depreciation and amortisation expense	663.98	3.30	653.73	3.74	1.57
Other expenses	3,642.23	18.10	2,936.52	16.78	24.03
Total expenses	17,320.64	86.09	15,585.39	89.06	11.13
Profit before exceptional item and tax	2,797.54	13.91	1,915.02	10.94	46.08
Exceptional item	245.83	1.22	-	-	100.00
Profit before tax	2,551.71	12.68	1,915.02	10.94	33.25
Tax expense	689.75	3.43	603.20	3.45	14.35
Net Profit for the year	1,861.96	9.26	1,311.82	7.50	41.94
Other comprehensive income / (loss)	266.05	1.32	(5.76)	(0.03)	(4,718.92)
Total comprehensive income for the year	2,128.01	10.58	1,306.06	7.46	62.93
Particulars	Year ended December 31, 2025	% of Total Income	Year ended December 31, 2024	% of Total Income	Change %
Income
Revenue from operations	11,008.05	91.10	9,114.40	95.18	20.78
Other income	1,075.72	8.90	461.75	4.82	132.97
Total income	12,083.77	100.00	9,576.15	100.00	26.19
Expenses
Employee benefits expense	6,941.67	57.45	6,152.53	64.25	12.83
Finance costs	136.09	1.13	77.61	0.81	75.35
Depreciation and amortisation expense	222.87	1.84	226.91	2.37	(1.78)
Other expenses	1,803.63	14.94	1,232.17	12.88	46.38
Total expenses	9,104.26	75.34	7,689.22	80.30	18.40
Profit before exceptional item and tax	2,979.51	24.66	1,886.93	19.70	57.90
Exceptional item	242.61	2.01	-	-	100.00
Profit before tax	2,736.90	22.65	1886.93	19.70	45.05
Tax expense	508.19	4.21	401.38	4.19	26.61
Net Profit for the year	2,228.71	18.44	1,485.55	15.51	50.03
Other comprehensive income / (loss)	(5.62)	(0.05)	(1.48)	(0.01)	279.73
Total comprehensive income for the year	2,223.09	18.41	1,484.07	15.50	49.80

1. Revenue

1.1 Revenue from Operations

R Systems derives revenue primarily from Information Technology services and Business Process Outsourcing services (knowledge services). Revenue is recognised when the performance obligations as promised have been satisfied, with a transaction price has been determined and when where there is no uncertainty as to the measurement or collectability of the consideration.

1.1.1 Based on Consolidated Financial Statement

(Rs. in million)

Particulars	Year ended December 31, 2025	%	Year ended December 31, 2024	%	change %
Information technology services	17,559.93	89.67	15,725.17	90.28	11.67
Business process outsourcing services (net of inter segment revenue)	2,022.13	10.33	1,692.10	9.72	19.50
Total	19,582.06	100.00	17,417.27	100.00	12.43

1.1.2 Based on Standalone Financial Statement

(Rs. in million)

Particulars	Year ended December 31, 2025	%	Year ended December 31, 2024	%	change %
Information technology services	8,922.49	81.05	7,357.95	80.73	21.26
Business process outsourcing services	2,085.56	18.95	1,756.45	19.27	18.74
Total	11,008.05	100.00	9,114.40	100.00	20.78

R Systems earns income from four principal geographic territories, namely Americas, Europe, APAC ("SEAC"),and MEA . A significant proportion of the revenues were derived from clients located in North America. The geographic breakdown is given below:

Geography	Year ended December 31, 2025
Americas	72.66%
APAC	17.18%
Europe	9.04%
MEA	1.12%
	100%

Geography	Year ended December 31, 2024
Americas	74.24%
APAC	16.31%
Europe	8.91%
MEA	0.54%
	100%

Revenue from Top 10 Clients	Year ended December 31, 2025
Top 10 Clients	24.83%
Top 5 Clients	17.17%
Top 3 Clients	13.12%
Largest Client	6.20%

Revenue from Top 10 Clients	Year ended December 31, 2024
Top 10 Clients	22.74%
Top 5 Clients	15.07%
Top 3 Clients	10.92%
Largest Client	5.57%

17.38

Customer Industry Type	Year ended December 31, 2025
Tech, Internet, Platforms & Services	38.62%
Health	12.97%
Manufacturing & Logistics (M&L)	14.01%
Telecom, Media & Entertainment (TME)	17.02%
Banking, Finance & Insurance (BFSI)	17.38%

Customer Industry Type	Year ended December 31, 2024
Tech, Internet, Platforms & Services	41.59%
Health	12.82%
Manufacturing & Logistics (M&L)	12.69%
Telecom, Media & Entertainment (TME)	17.76%
Banking, Finance & Insurance (BFSI)	15.14%

1.2 Other Income

(Rs. in million)

Particulars	Consolidated		Standalone
	Year ended December 31, 2025	Year ended December 31, 2024	Year ended December 31, 2025	Year ended December 31, 2024
Interest income	44.78	37.20	31.60	19.14
Dividend From subsidiary companies	-	-	555.25	401.73
Rental income from investment property	9.00	7.86	9.00	7.86
Rental income from subsidiary companies	-	-	4.54	-
Reversal of provision for doubtful debts (net)	-	-	-	6.75
Liability no longer required written back	9.24	21.34	7.97	15.94
Profit on sale of property, plant and equipment (net)	433.88*	-	434.31*	0.43
Miscellaneous income	39.22	16.74	33.05	9.90
Total other income	536.12	83.14	1,075.72	461.75

*Profit on sale of property, plant and equipment was mainly on account of Profit from sale of land, building and certain assets located at Company Noida Office.

2. Expenditures

2.1 Personnel Expenses

Personnel expenses primarily consist of salaries, wages, bonus, Provision for compensated absences, gratuity benefits, contribution towards provident and other funds and staff welfare expenses.

2.1.1 Based on Consolidated Financial Statement:

(Rs. in million)

Particulars	Year ended December 31, 2025	% of Total Income	Year ended December 31, 2024	% of Total Income	Change %
Salaries, wages and bonus	11,659.18	57.95	10,731.57	61.32	8.64
Gratuity expenses	86.00	0.43	75.62	0.43	13.73
Contribution to provident and other funds	573.67	2.85	521.09	2.98	10.09
Staff welfare expenses	301.90	1.50	284.05	1.62	6.28
Employee share based payment expense	251.94	1.25	298.86	1.71	(15.70)
Total	12,872.69	63.99	11,911.19	68.06	8.07
Particulars	Year ended December 31, 2025	% of Total Income	Year ended December 31, 2024	% of Total Income	Change %
Salaries, wages and bonus	6,271.78	51.90	5,510.84	57.55	13.81
Gratuity expenses	66.30	0.55	61.48	0.64	7.84
Contribution to provident and other funds	246.41	2.04	212.85	2.22	15.77
Staff welfare expenses	139.88	1.16	116.15	1.21	20.43
Employee share based payment expense	217.30	1.80	251.21	2.62	(13.50)
Total	6,941.67	57.45	6,152.53	64.25	12.83

2.2 Finance costs (Interest expenses)

(Rs. in million)

	Consolidated			Standalone
Particulars	Year ended December 31, 2025	Year ended December 31, 2024	Year ended December 31, 2025	Year ended December 31, 2024
On borrowings	75.63	22.95	75.63	22.95
On lease liabilities	66.02	60.67	60.46	54.63
On income tax	0.09	0.33	-	0.03
Total	141.74	83.95	136.09	77.61
2.3 Depreciation and Amortisation Expense (r s i n m ii on )
Particulars	Consolidated			Standalone
	Year ended December 31, 2025	Year ended December 31, 2024	Year ended December 31, 2025	Year ended December 31, 2024
Depreciation of property, plant and equipment	222.24	258.56	143.47	178.08
Depreciation of investment property	1.48	1.49	1.48	1.49
Depreciation on right-of-use assets	152.76	135.98	67.09	43.96
Amortisation of intangible assets	287.50	257.70	10.83	3.38
Total Depreciation and Amortisation	663.98	653.73	222.87	226.91
% of Total income	3.30	3.74	1.84	2.37

2.4 Operational and other expenses

Operational and other expenses include power and fuel, expenses on travelling and conveyance, software subscription charges, non-capitalised lease rent, commission, communication, legal and professional expenses including sub-contractors costs, cost of third party items, audit fees, Provision for doubtful debts (net), Foreign exchange fluctuation loss (net), advance written off, contributions towards corporate social responsibility and other miscellaneous items.

Particulars	Year ended December 31, 2025	% of Total Income	Year ended December 31, 2024	% of Total Income	Change %
Power and fuel	41.70	0.21	58.90	0.34	(29.20)
Rent - premises	73.71	0.37	57.00	0.33	29.32
Software subscription charges	309.79	1.54	250.00	1.43	23.92
Repair and maintenance	98.65	0.49	72.41	0.41	36.24
Commission	3.09	0.02	3.69	0.02	(16.26)
Travelling and conveyance	331.24	1.65	273.78	1.56	20.99
Communication costs	115.56	0.57	98.24	0.56	17.63
Legal and professional fees	1,835.25	9.12	1,394.78	7.97	31.58
Cost of third party items	323.65	1.61	369.00	2.11	(12.29)
Foreign exchange fluctuation (net)	34.84	0.17	10.86	0.06	100.00
Provision for doubtful debts (net)	101.27	0.50	7.10	0.04	1,326.34
Provision for doubtful advances (net)	1.72	0.01	10.73	0.06	100.00
Loss on sale / discarding of property, plant and equipment (net)	-	-	0.09	0.00	(100.00)
Loss on cancellation of leases (net)	-	-	0.82	0.00	(100.00)
Miscellaneous expenses (including Corporate social responsibility expenses)	371.76	1.85	329.12	1.88	12.96
Total	3,642.23	18.10	2,936.52	16.78	24.03

2.4.2 Based on Standalone Financial Statement:

(Rs. in million)

Particulars	Year ended December 31, 2025	% of Total Income	Year ended December 31, 2024	% of Total Income	Change %
Power and fuel	20.70	0.17	35.74	0.37	(42.08)
Rent - premises	16.09	0.13	22.08	0.23	(27.13)
Software subscription charges	232.42	1.92	193.29	2.02	20.24
Repair and maintenance	68.29	0.57	54.51	0.57	25.28
Commission	3.09	0.03	3.69	0.04	(16.26)
Travelling and conveyance	223.63	1.85	170.32	1.78	31.30
Communication costs	77.00	0.64	63.77	0.67	20.75
Legal and professional fees	818.44	6.77	462.69	4.83	76.89
Auditors remuneration	7.04	0.06	7.72	0.08	(8.81)
Foreign exchange fluctuation (net)	15.80	0.13	10.10	0.11	56.44
Provision for doubtful debts	49.79	0.41	-	-	100.00
Miscellaneous expenses (including Corporate Social Responsibility)	271.34	2.25	208.26	2.17	30.29
Total	1,803.63	14.93	1,232.17	12.87	46.38

2.5 Expectational items

On November 21, 2025, the Government of India notified provisions of the Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020 (collectively referred to as the "Labour Codes"), which consolidate multiple existing labour laws into a unified framework governing employment and post-employment benefits.

The Group and Company has assessed the financial implications of these changes and, pursuant to such assessment, recognised an incremental obligation of Rs. 245.83 million and 242.61 million, respectively, on account of increase in employee benefit liabilities arising from past service. Considering the impact arising from enactment of the new legislation and its non-recurring nature, the said amount has been presented under Exceptional Items.

2.6 Tax expense

Tax expense comprises current tax and deferred tax.

(Rs. in million)

Particulars	Consolidated		Standalone
	Year ended December 31, 2025	Year ended December 31, 2024	Year ended December 31, 2025	Year ended December 31, 2024
Profit Before T ax	2,551.71	1,915.02	2,736.90	1,886.93
Current tax	763.96	678.38	591.14	457.38
Deferred tax credit	(74.21)	(75.18)	(82.95)	(56.00)
Total Tax Expense	689.75	603.20	508.19	401.38
Effective T ax Rate (%)	27.03	31.50	18.57	21.27

Effective Tax Rate has decreased due to adoption of new tax regime in India, taxation of long term capital gain at lower rate and true up of previous periods tax provisions.

Refer Note 28 of the consolidated financial statements.

J. Details of significant changes i.e. change of 25% or more as compared to the immediately previous financial year, in key financial ratios, along with detailed explanations therefore, including:

Ratio	Consolidated			Standalone
	Year ended December 31, 2025	Year ended December 31, 2024	Variance	Year ended December 31, 2025	Year ended December 31, 2024	Variance
Debtors Turnover (DSO) (in days)	62	53	16.23%	50	43	17.30%
Inventory Turnover	NA	NA	NA	NA	NA	NA
Interest Coverage	16.95	22.82	-25.72% 1	13.21	19.36	-31.77% 1
Current Ratio	1.90	2.24	14.99%	1.68	1.75	-4.00%
Debt Equity Ratio	0.52	0.12	343.24% 1	0.56	0.12	351.27% 1
Operating Profit Margin	12.27%	11.00%	11.55%	16.33%	16.49%	-0.97%
Net Profit Margin	9.51%	7.53%	26.29% 2	20.25%	16.30%	24.23%

1. Due to increase in total debt during the year.

2. Due to increase in operational profits.

Notes:

Debtors Turnover (DSO) = Average Trade Receivables / Revenue from operations * 360

Operating Profit = Profit before tax (PBT) add: Finance cost, less: other income

Interest Coverage = Operating profit / Finance cost

Current Ratio = Current Assets / Current Liability

Debt Equity Ratio = Total Debt (borrowings + lease liabilities) / Shareholders equity

Operating Profit Margin = Operating profit / Revenue

Net Profit Margin = Profit after tax (PAT) / Revenue

Ratio	Consolidated			Standalone
	Year ended December 31, 2025	Year ended December 31, 2024	Variance	Year ended December 31, 2025	Year ended December 31, 2024	Variance
Return on Net worth	26.30%	21.24%	23.87%	37.04%	29.83%	24.16%

Return on net worth is computed as Profit for the year / Average shareholders equity.

Net profit increased from f1,311.82 mn to f1,861.96 mn on a consolidated basis and from f1,485.55 mn to f 2,228.71 mn on a standalone basis. Average shareholders equity has increased in line with the net profit increase adjusted for dividends paid during the year.

On behalf of the Board For R Systems International Limited Nitesh Bansal	Ruchica Gupta
(Managing Director & Chief Executive Officer)	(Chairperson & Non-Executive Independent Director)
DIN: 10170738	DIN: 06912329
Place: Chisinau, Moldova	Place: New Delhi
Date: May 27, 2026	Date: May 27, 2026