Sahana Systems Ltd Management Discussions

FY24-25 BUSINESS HIGHLIGHTS A YEAR OF ROBUST BUSINESS PERFORMANCE

In FY 2024-25, Sahana, as a leading deep-tech services company, achieved a remarkable total revenue of ^10,840.39 lakhs, reflecting strong year-on-year growth. This performance was predominantly driven by the IT Services segment, which contributed ^10,057.33 lakhs, accounting for 92.78% of the total revenue from operations.

The significant contribution from IT Services highlights Sahanas strategic focus on digital transformation and high-value technology solutions. The Hardware Trading segment contributed ^783.06 lakhs (7.22%), indicating a continued shift away from low-margin business lines toward scalable, innovation-led services.

With deep-tech capabilities in domains like Computer Vision AI, IoT, Big Data, Digital product engineering, Cloud computing, Electronic warfare and Information Warfare, Sahana continues to strengthen its position as a trusted technology partner for both government and enterprise clients, driving sustained growth and industry leadership.

IGNITING INNOVATION, EMPOWERING TRANSFORMATION

Over the past year, Sahana has accelerated its journey as a deep-tech services company, redefining possibilities through cutting-edge technology and purposeful innovation. At the core of this evolution is our commitment:

To harness the power of advanced technology and human ingenuity to empower transformation across industries.

This ambition drives our commitment to harness the best of advanced technologies?ranging from AI, IoT, Digital Product Engineering, Cloud computing and Big Data to Electronic and Information Warfare?and deliver impactful solutions that serve national interests and empower global enterprises.

Sahana has made significant strides across government, defence, and enterprise sectors. With a bold approach to innovation, and through our growing ecosystem of subsidiaries?Softvan, Softvan Labs, Sourceved, and Applie?we are expanding both capability and reach.

We remain confident in our path forward: to not just keep pace with change, but to lead it?for our clients, our teams, our communities, and the future we are helping to build.

TRANSLATING VISION INTO IMPACT - SAHANAS STRATEGIC OBJECTIVES

As part of our journey to become a ^5,000 Crore deep-tech enterprise, Sahana is guided by a clear set of strategic objectives that translate our purpose into tangible outcomes:

• Technology Leadership through innovation-led, differentiated services in AI, IoT, Big Data, Cloud computing, Digital product engineering and Defence Tech.

• Employer of Choice across India and global markets by nurturing a culture of learning, agility, and purpose-driven growth

• Trusted Digital Partner for government, defence, and enterprise clients seeking mission- critical transformation

• Integrated ESG Commitment, embedding sustainability, social responsibility, and governance across our operations

• Maximizing Shareholder Value by consistently delivering top-quartile Total Shareholder Return (TSR) over the medium term

These objectives reflect our unwavering focus on scaling with integrity, innovating with intent, and delivering with excellence.

ENABLING TRANSFORMATIONAL OUTCOMES FOR OUR CLIENTS

Sahana continues to be the partner of choice for government, defence, and enterprise organizations seeking innovation-led digital transformation. Our deep-tech expertise and relentless client focus enable us to consistently exceed expectations across diverse sectors and mission-critical environments.

Sahanas approach is rooted in engineering outcomes, not just solutions. For example, we deployed an AI-based battlefield simulation and decision support system for a defence client, integrating computer vision and geospatial analytics to assist in strategic planning and combat readiness.

We also partnered with a European client to modernize a legacy content management system,

leveraging headless architecture and Sitecore CMS (via our Sourceved subsidiary) to accelerate go-to- market cycles and improve customer engagement.

For a global healthcare client, Sahana fully developed a comprehensive patient health KPI management platform (via our Softvan subsidiary), capable of transacting millions of real-time health data points daily. This robust platform equips healthcare providers with actionable insights to enable proactive, data-driven patient care.

Additionally, we delivered an AI-driven research analysis platform (via our Softvan subsidiary) for a long-standing client, enabling the creation of complex surveys, deep analytical insights, and dynamic reporting. The solution empowers the client to make informed decisions backed by structured, realtime feedback from diverse audiences.

These successful deployments reflect Sahanas ability to deliver high-impact solutions across industries. Our enduring client relationships are a testament to our consistent value delivery and deep domain alignment.

As we continue scaling, our ability to fuse deep-tech capabilities with domain understanding positions Sahana as an indispensable strategic partner in our clients digital transformation journeys.

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DRIVING SHAREHOLDER VALUE THROUGH STRATEGIC GROWTH AND OPERATIONAL EXCELLENCE

Sahana is firmly committed to enhancing long-term shareholder value by pursuing sustainable growth, robust profitability, and operational efficiency. As we move toward our vision of becoming a ^5,000 Crore enterprise, our strategic focus remains anchored on organic expansion, margin optimization, and disciplined capital allocation.

We are focused on improving our overall Return on Invested Capital (ROIC) by leveraging our core strengths in deep-tech services and expanding high-value solution areas like AI, IoT, Digital product engineering, cloud computing and Electronic Warfare. Our capital allocation approach is structured to balance strategic reinvestment in innovation with consistent returns to shareholders.

While we continue to maintain financial prudence, Sahana is committed to delivering top-quartile returns over the medium term, guided by transparency, governance, and performance excellence.

Our consistent track record of building long-term relationships, improving revenue quality, and scaling across verticals ensures that we remain well-positioned to generate superior value for all our stakeholders in the years ahead.

BUSINESS SEGMENTS

We are proud to be CMMI Maturity Level 5 compliant, reflecting our commitment to delivering high- quality, process-driven solutions across our service lines. Additionally, Sahana has received multiple international certifications from Equalitas Certifications Limited, including ISO 9001:2015 (Quality Management), ISO/IEC 27001:2022 (Information Security Management), ISO 14001:2015 (Environmental Management), and the recently introduced ISO/IEC 42001:2023 (Artificial Intelligence Management Systems). These accreditations underscore our focus on excellence, data security, sustainability, and responsible AI governance.

Sahana is registered under the "IT Services" industry and the "Product Development" sector,

reflecting our dual expertise in service delivery and innovation.

Sahana is a deep-tech services company engaged in delivering a broad spectrum of IT and digital engineering solutions, including web and mobile application development, AI & ML solutions, ChatBot development, product prototyping, UI/UX design, graphic design, SEO/ASO, digital marketing, cybersecurity, and legacy system migration. We also provide outsourced IT services

tailored to client-specific needs.

Our industry focus spans healthcare, surveillance, defence, retail, education/e-learning, fintech, media & entertainment, and banking. We specialize in developing solutions that are scalable, secure, and built for mission-critical environments.

In addition, Sahana is engaged in the trading of IT hardware and digital equipment, including computers, laptops, LEDs, and devices related to franking systems.

Our strong delivery record has helped us build long-standing relationships with clients, many of whom continue to engage with us through repeat business across multiple project cycles.

The Company operates in the following segments:

Period	Total Revenue	IT Services		Hardware Trading
	(Rs. In Lakhs)	Revenue (Rs. In Lakhs)	Contribution in revenue from operations	Revenue (Rs. In Lakhs)	Contribution in revenue from operations
FY 22-			47.03%	1,278.72	52.97%
2023	2,414.23	1,135.51
FY 23-			95.70%		4.30%
2024	5,367.46	5,136.66		230.80
FY 24-			92.78%		7.22%
2025	10,840.39	10,057.33		783.06

Sahana is a trusted deep-tech services company delivering scalable, future-ready solutions across strategic sectors such as FinTech, Healthcare, Defence, Government, Education (EdTech), and Digital Product Engineering. Leveraging advanced technologies including AI/ML, IoT, Computer Vision, ERP, CMS, Electronic Warfare (EW), and Information Warfare (IW), Sahanas diversified service offerings include:

1. Web Application Development

Development of secure and scalable web platforms tailored to enterprise and sector-specific digital workflows.

2. Mobile Application Development

Cross-platform and native mobile applications with seamless integration, optimized performance, and modern UX.

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3. Artificial Intelligence (AI) & Machine Learning (ML) Solutions

Smart, self-learning systems enabling automation, prediction, classification, and analytics at scale.

4. Computer Vision AI

AI-powered visual systems for surveillance, safety compliance, asset tracking, and operational intelligence.

5. AI Dashboards & Analytics Platforms

Real-time dashboards offering visualization of key metrics, predictive models, decision support systems, and business intelligence.

6. DefenceTech - Electronic Warfare (EW) & Information Warfare (IW)

Advanced, indigenous solutions for secure communications, threat monitoring, command and control, and decision-making systems for defence applications.

7. FinTech Solutions

Development and integration of core banking systems, payment gateways, digital wallets, loan origination platforms, regulatory tech, and AI-based fraud detection.

8. Smart Classroom Solutions (EdTech)

Technology-driven learning environments integrating interactive content, AI-assisted assessment tools, remote learning platforms, smart boards, and collaboration systems to

enhance digital education delivery across institutions.

9. ChatBot and Conversational AI Development

AI-enabled chatbots for automated customer service, query handling, lead generation, and digital interaction.

10. Product Prototyping & MVP Development

Agile prototyping and MVP development for startups, enterprises, and innovation labs to accelerate product testing and validation.

11. UI/UX Design

Designing user-friendly, visually engaging interfaces across web, mobile, and enterprise software platforms.

12. Graphic Design

Creative design services for digital branding, product collateral, communication design, and visual identity.

13. Search Engine Optimization (SEO) & App Store Optimization (ASO)

Optimization solutions for enhancing digital presence, discoverability, and search rankings across platforms.

14. Digital Marketing

End-to-end digital campaigns including SEO/SEM, social media, email marketing, content strategy, and performance analytics.

15. Website & Application Migration

Migration of legacy systems to modern architectures and cloud-native environments with enhanced performance and security.

16. Cybersecurity Solutions

Comprehensive cybersecurity services covering infrastructure protection, data privacy, compliance, and cyber resilience strategies.

17. IT Hardware Trading

Trading of IT equipment such as laptops, desktops, LEDs, and franking peripherals for enterprises, institutions, and government clients.

OUR COMPETITIVE STRENGTHS

1. End-to-End Deep-Tech & Digital Solutions

Sahana offers a comprehensive portfolio of end-to-end services, spanning AI/ML, IoT, Computer Vision, Cybersecurity, Digital Product Engineering, FinTech, EdTech, DefenceTech (EW/IW), ERP, and CMS. Our integrated approach enables clients to access strategy, engineering, and execution under one roof, ensuring speed, scale, and sustained value.

2. Promoter-Led Vision with Domain Expertise

Under the strategic leadership of our Promoter, who brings extensive experience in technology innovation, business building, and project execution, Sahana has grown into a trusted name across sectors including Government, Defence, Healthcare, FinTech, and Education. This leadership has empowered Sahana to scale responsibly while maintaining a high degree of technological agility and client focus.

3. Commitment to Quality and Delivery Excellence

Sahana has established a reputation for delivering high-quality, mission-critical solutions through a blend of innovation, precision engineering, and client-centric processes. Our repeat client engagements across multiple industries reflect our unwavering focus on quality, transparency, and long-term value creation.

4. Certifications, Accreditations & Recognitions

Our commitment to global standards is validated through industry-leading certifications such as CMMI Level 5 Compliance, ISO 9001:2015 (Quality Management), ISO/IEC 27001:2022 (Information Security), ISO 14001:2015 (Environmental Management), and ISO/IEC 42001:2023 (AI Management Systems). These accreditations reinforce our credibility and readiness to serve clients with secure, compliant, and responsible solutions.

OUR BUSINESS STRATEGY

1. Expand Domestic and Global Presence

Sahana aims to deepen its footprint across both Indian and international markets by building regional delivery hubs, forging strategic alliances, and entering new verticals. With a strong foundation in Government, Defence, FinTech, Healthcare, and EdTech, we seek to scale our market reach while remaining rooted in domain expertise.

2. Strengthen EW and IW Capabilities in Government and Defence

As part of our commitment to national strategic priorities, Sahana is focused on strengthening its Electronic Warfare (EW) and Information Warfare (IW) offerings through R&D-led innovation, system integration capabilities, and indigenous technology development. We aim to serve critical missions in collaboration with defence organizations, PSUs, and government stakeholders.

3. Deliver AI-Driven Solutions for Complex Sectoral Challenges

Leveraging our expertise in Artificial Intelligence and Machine Learning, Sahana continues to develop AI-based platforms and decision support systems tailored to address complex, large- scale challenges across domains such as defence intelligence, healthcare analytics, citizen services, surveillance, education, and financial risk assessment.

4. Focus on Emerging Service Offerings through Innovation

We are consistently investing in new-age service offerings including Computer Vision, Smart Classroom Systems, Predictive Analytics, Cybersecurity, and Digital Product Engineering.

Through internal innovation hubs and our subsidiary ecosystem, we rapidly convert emerging technologies into market-ready solutions.

5. Enhance Operating Effectiveness and Efficiency

Sahana is committed to driving operational excellence through process automation, agile delivery models, talent upskilling, and scalable infrastructure. Our aim is to continuously improve margins, delivery velocity, and client satisfaction while remaining agile in execution.

KEY RISK FACTORS AFFECTING FUTURE OPERATIONS

Our Companys future performance and results of operations may be influenced by several external and internal risk factors, including but not limited to:

1. Regulatory Changes

Any adverse changes in laws, policies, or regulations applicable to the IT, DefenceTech, FinTech, or Digital Services industry?at either domestic or international levels?could impact our operational flexibility and compliance requirements.

2. Economic, Fiscal, or Political Volatility

Fluctuations in macroeconomic conditions, fiscal policy shifts, or political uncertainties in India or other geographies where we operate may affect client spending, project timelines, and overall business sentiment.

3. Talent Retention and Workforce Stability

Our ability to retain and attract experienced professionals and domain experts is critical to ensuring service continuity, innovation, and client satisfaction. High attrition or skill gaps could disrupt project execution and growth plans.

4. Compliance with Multi-Jurisdictional Regulations

Operating across multiple sectors and geographies requires stringent compliance with diverse regulatory frameworks. Non-compliance or delays in regulatory approvals could result in penalties or business restrictions.

5. Competitive Intensity

We face competition from both established players and new entrants in the IT services and defence technology domains. Pricing pressure, talent competition, or loss of market share could impact our profitability.

6. Dependency on Subcontracted Work from Large Contractors

A significant portion of our work is derived through subcontracts from large prime vendors or integrators. Any reduction, delay, or termination of these subcontracting arrangements could materially affect our revenue streams.

CUSTOMERS OF THE COMPANY

Our top ten customers contributed approximately 88.00%, 81.00%, and 90.30% of our total revenue from operations during Financial Year 2025, Financial Year 2024, and Financial Year 2023,

respectively. This high client concentration presents a potential risk to our business continuity and revenue stability.

The loss of any significant client could have a material adverse impact on our financial performance. While we strive to maintain long-term relationships, we cannot assure that historical business volumes with these clients will continue, or that we will be able to promptly replace lost business in case of client attrition.

Further, major client-side events?such as bankruptcy, insolvency, mergers, acquisitions, or

leadership changes?can disrupt ongoing contracts or reduce engagement scope. If any key client becomes insolvent, it may result in delayed receivables or necessitate a write-off, adversely affecting our financial condition and profitability.

Additionally, our sales cycle typically involves a comprehensive and consultative engagement, wherein clients undertake technical evaluations, internal reviews, and cross-functional decisionmaking. This often requires customer education, proof-of-value demonstrations, and addressing the clients strategic and operational priorities.

Our ability to scale engagements depends not just on technical delivery, but also on effectively articulating cost efficiency, business value, and technological differentiation?especially in

competitive, multi-vendor environments. Therefore, maintaining client trust and delivering consistent value remains critical to sustaining our revenue base.

RISK AND CONCERN

Risk management is an integral part of Sahanas strategic and operational framework. The Company follows a proactive approach to identify, assess, monitor, and mitigate key risks that could potentially impact its business performance and long-term sustainability. A robust risk management framework is in place to address financial, operational, technological, compliance, and strategic risks in alignment with industry best practices.

However, the business environment remains dynamic, and changes in taxation laws, government policies, and regulatory frameworks may pose risks to operations and profitability. The management regularly reviews and updates its risk control mechanisms to ensure operational continuity, compliance adherence, and strategic agility.

OUTLOOK

While the industry continues to offer high profit margins, it is also evolving rapidly in terms of competition, innovation, and client expectations. In response, Sahana has undertaken a range of remedial and forward-looking measures, including enhanced strategic planning, research and development (R&D) investments, cost optimization initiatives, and expansion of its marketing and delivery network.

With its strong domain expertise, deep-tech capabilities, and customer-centric approach, the Company remains confident in its ability to address emerging challenges and capitalize on new opportunities in both domestic and international markets.

FINANCIAL PERFORMANCE OVERVIEW

The following discussion relates to the Rupee-denominated financial performance of Sahana System Limited for the financial year ended March 31, 2025.

The financial statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) as prescribed under Section 133 of the Companies Act, 2013, and as amended from time to time. The significant accounting policies applied in the preparation of these statements are disclosed in detail under the Notes to the Financial Statements.

The table below provides a summary of the Companys audited financial results for the year ended March 31, 2025:

(Rs in Lakhs except EPS)

Particulars	F.Y 2024-25			F.Y 2023-24
	Revenue	% of Revenue	Growth	Revenue	% of Revenue	Growth
Revenue from operations	10,840.39	100.00%	2.02	5,367.46	100.00%	2.22
Earnings before interest, tax, depreciation and amortization (EBITDA) (before other income)	2,623.56	24.20%	1.37	1,909.66	35.58%	1.97
Profit Before Tax (PBT)	2,542.65	23.46%	1.35	1,888.72	35.19%	2.13
Earnings per share (in Rs.)	20.59	-	1.03	20	-	1.74

ANALYSIS OF REVENUE GROWTH

On a reported basis, SSL revenue grew 2.02 Times in FY 2024, compared to the prior year. DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

	2024-25	2023-24	2022-23
Debtors Turnover Ratio	3.28	5.48	4.02
Inventory Turnover Ratio	NA	NA	NA
:Debt Service Coverage Ratio	70.53	183.78	9.92
Current Ratio	4.20	1.48	1.71
:Debt Equity Ratio	0.03	0.24	0.45
Trade Payable turnover Ratio	5.36	2.95	4.66
Net Profit Margin	0.16	0.28	0.26
Return on Equity Ratio	0.17	0.47	0.83
:Return on Capital Employed	0.19	0.29	0.56
P/E Ratio	7.92	0.87	0.87
Return on Investment	-	-	-

INTERNAL CONTROL SYSTEMS & RISK MANAGEMENT

Sahana System Limited has implemented a robust Internal Control System designed to ensure the efficiency and effectiveness of operations, accuracy and reliability of financial reporting, and compliance with applicable laws and regulations. A key component of this system is the accounting control framework, which safeguards the Company from excessive financial risks and supports the integrity of both internal and external financial disclosures.

The Companys internal audit and control functions are carried out through an independent internal audit team, operating in coordination with a professional audit firm. Internal audits are conducted on a quarterly, risk-based schedule and cover business processes, financial controls, compliance mechanisms, and operational effectiveness. These audits assess adherence to internal policies, statutory regulations, and legal frameworks.

Key features of the internal control environment include:

• A defined authorization matrix with clear segregation of roles and responsibilities

• Physical verification protocols, checks and balances

• Preventive compliance checks and monitoring of periodic financial statements

• Continuous review and enhancement of audit procedures for relevance and timeliness The internal audit process involves:

• Risk assessment and verification of controls

• Review of accounting records and financial documentation

• Evaluation of compliance with applicable Ind AS standards, statutory rules, regulatory directives, and management policies

STRUCTURED RISK MANAGEMENT FRAMEWORK

The Company has institutionalized a comprehensive risk management framework that actively identifies, monitors, and mitigates potential risks. The framework is structured around three core components:

• Risk Identification

• Risk Assessment and Mitigation

• Risk Monitoring and Assurance

Key areas of risk such as Client Concentration, Technology Disruption, and Credit Control

have been identified and are monitored across various levels of management. Mitigation measures have been implemented, and the Audit Committee and Company Management regularly review and update the risk mitigation strategies to align with evolving business dynamics.

Sahanas Structured Risk Management Process reinforces stakeholder confidence by ensuring that risks are clearly understood and proactively managed. The system is dynamic and is continuously strengthened to address emerging risks and compliance expectations.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

At, Sahana System Limited, our employees are the driving force behind our innovation, execution excellence, and sustained growth. The Company takes pride in the commitment, competence, and dedication demonstrated by its workforce across all functions and levels.

We have established a structured induction process for new hires across all locations, supported by ongoing learning and development initiatives, including management development programs to

continuously upgrade leadership and technical skills. Our performance management system is

anchored in Key Result Areas (KRAs), enabling transparent, merit-based appraisals for senior management and ensuring alignment with strategic business objectives.

Human capital remains central to Sahanas long-term growth strategy. Accordingly, the Company is focused on further aligning its HR policies, talent management processes, and engagement initiatives with evolving business needs and technology trends. Employees are regularly provided access to training programs, upskilling platforms, and knowledge-sharing sessions to stay updated with the latest developments in AI, IoT, Digital Engineering, and other emerging technologies.

The Company also continues to foster a culture of collaboration, inclusivity, and continuous learning,

ensuring that its workforce is future-ready and agile.

The industrial relations environment remained cordial throughout the year, reflecting mutual trust and respect between management and employees. Sahana remains committed to maintaining an empowering and performance-oriented workplace culture that supports both individual aspirations and organizational objectives.

CAUTIONARY STATEMENT

Certain statements in this Management Discussion and Analysis (MD&A) may constitute "forwardlooking statements" within the meaning of applicable securities laws and regulations. These statements relate to the Companys objectives, expectations, projections, plans, estimates, and strategies, which by their nature involve known and unknown risks, uncertainties, and other factors beyond the Companys control.

Actual results, performance, or achievements may differ materially from those expressed or implied in such forward-looking statements. Significant factors that could influence outcomes include, but are not limited to:

• Fluctuations in demand and pricing trends across key markets

• Changes in the regulatory, taxation, and policy environment

• Macroeconomic conditions within India and globally

• Technological shifts, geopolitical developments, and competitive dynamics

The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Readers are advised not to place undue reliance on these statements and to consider all risks and uncertainties while evaluating the Companys future outlook.

FOR AND ON BEHALF OF THE BOARD SAHANA SYSTEM LIMITED	FOR AND ON BEHALF OF THE BOARD SAHANA SYSTEM LIMITED
SD/- PRATIK RAMJIBHAI KAKADIA CHAIRMAN AND MANAGING DIRECTOR DIN:07282179	SD/- HETAL PRATIKBHAI KAKADIYA DIRECTOR DIN:0838179

DATE: AUGUST 30, 2025 PLACE: AHMEDABAD