SecUR Credentials Ltd Management Discussions

(Pursuant to Regulation 34(2)(e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015)

1. Industry Structure and Developments

The background screening and verification industry has witnessed significant growth in recent years driven by increasing regulatory requirements, digital transformation, and growing emphasis on risk management by organizations. Companies across sectors such as IT, banking, financial services, manufacturing, healthcare, and e-commerce are increasingly adopting background verification services to ensure compliance, mitigate fraud risks, and enhance operational transparency.

Indias growing formal employment ecosystem, increasing outsourcing of compliance-related processes, and rising cross-border hiring are further contributing to the growth of the background verification industry. Additionally, advancements in Artificial Intelligence (AI), Robotic Process Automation (RPA), and digital verification tools are transforming the industry by improving accuracy, speed, and scalability of verification processes.

Financial institutions and banks are also increasingly using verification services for loan processing, KYC validation, and fraud detection, creating new opportunities for companies operating in this segment.

SecUR Credentials Limited, being one of the leading background verification companies in India and the first listed company in this industry, continues to leverage its technological capabilities and industry experience to strengthen its market position.

2. Opportunities and Threats Opportunities

The Company operates in a niche but rapidly growing industry with multiple growth drivers:

• Rising demand for employee background verification across industries.

• Increasing focus on risk management and compliance by corporates.

• Growth in digital hiring and remote workforce, requiring robust verification processes.

• Expansion of services such as vendor verification, KYC verification, and loan verification.

• Increasing adoption of AI-based automation and analytics to enhance operational efficiency.

The Company has also introduced loan verification services for banks, which is expected to contribute significantly to revenue growth in the coming years.

Threats

Despite strong growth prospects, the industry faces certain challenges:

• Increasing competition from new technology-driven verification service providers.

• Data privacy and regulatory compliance requirements.

• Dependence on external databases and information sources for verification processes.

• Cybersecurity risks due to increasing digitalization.

• Fluctuations in hiring activity across industries due to economic cycles.

The Company continues to address these challenges by strengthening its technological infrastructure and maintaining robust compliance systems.

3. Segment-wise or Product-wise Performance

The Company primarily operates in the background screening and verification services segment, which includes:

• Employee Background Verification

• Vendor and Supplier Verification

• KYC Verification Services

• Loan Verification Services for Banks

• Due Diligence and Risk Screening Services

During the financial year under review, the Company focused on expanding its service offerings and on boarding new clients across various sectors including information technology, banking, and financial services.

The launch of loan verification services for banks represents a strategic expansion into the financial services verification segment and is expected to contribute significantly to future growth.

4. Overview of Financial Performance

During the financial year ended 31 st March 2025, the performance of the Company was as follows:

Key Financial Highlights:

Particulars	FY 2024-25	FY 2023-24
	In lakhs	In lakhs
Revenue from Operations	55.24	2812.89
Total Expenditure	885.39	4069.99
Profit/(Loss) Before Tax	-804.13	-683.44
Profit/(Loss) After Tax	-804.13	-245.50

5. Outlook

The outlook for the background verification industry remains positive due to the increasing importance of risk mitigation and compliance across industries.

Key growth drivers for the Company include:

• Rising adoption of digital verification solutions.

• Expansion into banking and financial sector verification services.

• Leveraging AI and automation technologies to scale operations.

• Increasing demand for global verification services.

The Company intends to continue investing in technology, automation, and service diversification to enhance operational efficiency and strengthen its competitive advantage.

6. Risks and Concerns

The Company has identified various risks that could impact its operations and financial performance:

• Operational Risk: Dependence on external information sources for verification processes.

• Data Security Risk: Protection of sensitive client and employee data.

• Regulatory Risk: Changes in data protection and privacy regulations.

• Competition Risk: Increasing competition from domestic and international service providers.

• Economic Risk: Slowdown in hiring activities impacting demand for verification services.

The Company has implemented appropriate risk management frameworks and internal controls to

mitigate these risks.

7. Internal Control Systems and their Adequacy

The Company has established adequate internal financial control systems commensurate with the size and nature of its operations.

Internal controls ensure:

• Accuracy and reliability of financial reporting

• Compliance with applicable laws and regulations

• Safeguarding of assets

• Prevention and detection of fraud

8. Discussion on Financial Performance with Respect to Operational Performance

The financial performance of the Company during FY 2023-24 reflects:

• Stable revenue generation from core verification services.

• Improved profit margins due to operational efficiencies.

• Increased adoption of technology and automation tools to enhance productivity.

• Expansion of service offerings including loan verification services.

These initiatives have enabled the Company to improve profitability despite relatively stable revenue growth.

9. Human Resources

Human capital continues to be a key strength of the Company. The Company focuses on building a skilled workforce with expertise in verification processes, risk management, and technology-enabled solutions.

The Company promotes a culture of:

• Continuous learning and professional development

• Ethical business practices

• Employee engagement and performance excellence Industrial relations remained cordial throughout the financial year.

10. Key Financial Ratios

RATIO	2024-25	2023-24
Current Ratio	2.13	2.10
Debt Equity Ratio	0.52	0.45
Return on Equity Ratio	(0.21)	(0.06)
Trade Receivable turnover Ratio	0.02	0.79
Net Capital turnover Ratio	0.02	0.85
Net Profit Ratio	(14.56)	(0.09)
Return On Capital Employed	(0.19)	0.11
Return on Investment	(0.03)	(0.02)

Pursuant to the requirements of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the details of significant changes (i.e., change of 25% or more as compared to the immediately previous financial year) in key financial ratios are explained below:

1. Return on Equity - The Return on Equity decreased from (0.06) in FY 2023-24 to (0.21) in FY 2024-25. The decrease is primarily attributable to the decline in profitability during the financial year, resulting in a lower return generated on shareholders equity.

2. Trade Receivable Turnover Ratio - The Trade Receivable Turnover Ratio decreased from 0.79 in FY 2023-24 to 0.02 in FY 2024-25. The decrease is primarily attributable to the significant decline in revenue from operations during the financial year, resulting in lower turnover of trade receivables.

3. Net Capital Turnover Ratio - The Net Capital Turnover Ratio decreased from 0.85 in FY 2023-24 to 0.02 in FY 2024-25. The decrease is primarily attributable to the significant reduction in revenue from operations, resulting in lower utilization of the net capital employed for generating revenue.

4. Net Profit Margin (%) - The Net Profit Margin decreased from (0.09%) in FY 2023-24 to (14.56%) in FY 2024-25. The decrease is primarily attributable to the loss incurred during the financial year, mainly due to the impact of operating expenses and finance costs in relation to the reduced revenue.

5. Return on Capital Employed - The Return on Capital Employed decreased from 0.11 in FY 2023-24 to (0.19) in FY 2024-25. The decrease is primarily attributable to the decline in operating profitability during the financial year, resulting in lower returns generated from the capital employed in the business.

6. Return on Investment - The Return on Investment decreased from (0.02) in FY 2023-24 to (0.03) in FY 2024-25. The decrease is primarily attributable to the decline in profitability during the financial year, which resulted in lower returns generated on the funds invested in the Company.

The changes in the above financial ratios are mainly attributable to variations in the operational performance and financial position of the Company during the financial year. The Board of Directors is continuously reviewing the business operations and financial performance of the Company and is taking necessary and appropriate steps to improve operational efficiency, revenue generation, and overall financial performance. The Directors are making their best efforts to strengthen the Companys business operations and improve its financial position in the coming financial years in compliance with the applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

11. Cautionary Statement

Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, and expectations may constitute forward-looking statements within the meaning of applicable laws and regulations.

Actual results may differ materially from those expressed or implied due to various factors including economic conditions, regulatory developments, competitive environment, and other risks beyond the Companys control.

By Order of the Board of Directors
For SECUR CREDENTIALS LIMITED

Sd/-
ASHISH RAMESH MAHENDRAKAR
MANAGING DIRECTOR
DIN: 03584695

Date: 30.09.2026
Place: Mumbai