Silver Touch Technologies Ltd Management Discussions

In this Management Discussion and Analysis Report, the Directors present a detailed overview of the companys performance, accomplishments, and future prospects for the financial year ended 31 st March, 2025. The report is intended to offer stakeholders valuable insights into the companys operations , key financial indicators, risk management strategies, opportuni es, challenges, and overall outlook.

A. INDUSTRY STRUCTURE AND DEVELOPMENTS

The global economy in 2024 operated within a mul faceted and uncertain geopoli cal environment, shaped by enduring con icts such as the India-Pakistan tensions and escala ng trade fric ons arising from renewed U.S. tari policies. Despite these macroeconomic headwinds, the global economy displayed measured resilience. According to IMF es mates, global GDP grew by approximately 3.2% in 2024, improving modestly from 2.8% in 2023. This recovery was fueled largely by strong performances in emerging markets and a surprisingly robust 2.8% GDP growth in the United States. Conversely, the Eurozone lagged, with GDP growth limited to 1.3%, impacted by dampened consumer sen ment and persistent energy-related in a onary pressures. In response to these vola le condi ons, corpora ons worldwide recalibrated their strategies pivo ng from aggressive expansion towards enhancing operational resilience, digital maturity, and cost efficiency . This strategic realignment was clearly reflect ed in global IT spending, which reached approximately USD 5.44 trillion in 2024, represen ng an 8.3% year-on-year increase (Source: Gartner). This surge underscores the cri cal importance of digital transforma on, automa on, and cloud adoption in building future-ready enterprises. The global IT services industry has seen accelerated momentum in areas such as Ar cial Intelligence (AI), Cloud Compung, Cybersecurity, and Enterprise Automaon. Cloud services alone accounted for over USD 675 billion in spending, while AI investments exceeded USD 200 billion, emphasizing the enterprise-wide push for intelligent and scalable digital ecosystems.

COMPANY OUTLOOK SILVER TOUCH TECHNOLOGIES LIMITED

Against the backdrop of rapid technological advancement and global economic transforma on, Silver Touch Technologies Limited (STTL) has further solidited its position as a dependable and future-ready digital transforma on partner. With a legacy spanning over two decades, STTL consistently delivers comprehensive, end-to-end IT solu ons, seamlessly integra ng Ar cial Intelligence (AI), Business Intelligence, Cloud Compu ng, Cybersecurity, Big Data, and Process Automa on into client ecosystems.

In an era where resilience and adaptability de ne long-term success, STTL remains commied to leveraging technology as a catalyst for stability, efficiency , and transforma ve growth across markets. There is a new wave of dynamism in technologies. The industry is feeling the pressure to build AI strategies and stay ahead. We saw genera ve AI star ng to reshape the industry in scal 2024-25. We continued to witness businesses a emp ng to reimagine their cost structures, increase business resilience and agility, personalize experiences for customers and employees, and launch new and disrup ve products and services, aided by genera ve AI. With our leadership position in AI, we believe we are well-posi oned to take advantage of these market opportuni es.

Silver Touch Technologies Limited (STTL), with over two decades of exper se, has been at the forefront of digital innova on, playing an integral role in transforming businesses globally. Headquartered in Ahmedabad, India, and with a presence in the USA, UK, and Canada, STTL offer s a comprehensive suite of IT solu ons, including enterprise so ware services, digital transforma on, ERP soluons, e-gover finance services, managed security services, and cloud solu ons. The companys commitment to excellence is reflect ed in its CMMi Level 5 cer ca on and a dedicated team of over 1,400 IT professionals serving more than 2,000 clients worldwide.

Industry Trends and STTLs Strategic Response

1. Digital Transforma on and Automation : The accelerating adoption of digital transforma on has led to increased demand for automa on solu ons. STTLs offer ings in Robo c Process Automation (RPA), Ar cial Intelligence (AI), Machine Learning (ML), and Internet of Things (IoT) position the company as a leader in this domain. Their RPA services, for instance, have enabled industries to achieve produc vity gains of up to 80% by automa ng manual processes.

2. Cloud Computing and ERP Solu ons : As businesses migrate to cloud environments, STTLs exper se in SAP Business One, SAP S/4 HANA, and Odoo ERP solu ons facilitates seamless transi ons. The companys end-to-end ERP consul ng services, encompassing licensing, implementa on, customiza on, support, and hos ng, ensure op mized business processes for clients across various industries.

3. E- Governance Ini a ves : STTLs involvement in e-gover finance projects underscores its commitment to enhancing public sector services. The companys solu ons, including G2C, G2B, and G2G portals, single-window solu ons, and AI-powered assessments, have been instrumental in digi zing government services and improving ci zen engagement.

4. Cybersecurity and Managed Services : With the increasing frequency of cyber threats, STTLs managed security services, such as SOC-as-a-Service, VAPT, and iden ty and access management, provide robust protec on for businesses. These services are complemented by 24/7 support and monitoring, ensuring the security and integrity of client operations . In todays fast-paced technological environment, STTL is dedicated to delivering forward-thinking, customer-focused solu ons. By staying a uned to emerging industry trends and capitalizing on its deep domain expercise, the company consistently enables both businesses and public sector organiza ons to drive digital transforma on and pursue sustainable, long-term growth.

B. SNAPSHOT OF BUSINESS SEGMENTS

Enterprise Soware Services

Applica on development Digital engineering Cloud solu ons

Digital Transforma on

Ar cial Intelligence (AI) Data analy cs Blockchain & IoT Robotic Process Automation (RPA)

ERP Solu ons

SAP Business One & S/4 HANA Odoo ERP

ERP consul ng, implementa on, and support

E- Governance Services

Government portals (G2C, G2B, G2G) Dashboards and single-window pla orms AI-based public service solu ons

Managed Security Services

SOC-as-a-Service

Cloud & endpoint security VAPT and iden ty/access management

Modern Workplace Solu ons

IT infrastructure & consulng Communication & collabora on tools

Cloud Services

Public, private, and hybrid cloud Cloud monitoring & virtual desktops Silver Cloud and AWS integra on

C. OPPORTUNITIES AND THREATS

Major Opportuni es for the Company are as follows:

1. Expansion into New Geographies

2. Adop on of Emerging Technologies

3. Rise of IT Automation Across Sectors

4. Long experience of the promoters in the industry;

5. Strong Leadership and Industry Experience

6. Comprehensive End-to-End IT Solutions

7. We follow the Quality standards (CMMI Maturity Level 5 Cer ca on) which are followed by leading IT companies.

8. Client-Centric and Flexible Delivery Models

9. Diverse Industry Experience

Major Threats/ Challenges for the Company are as follows:

1. High Dependency on Evolving Technologies

2. Complexity in Technology Integra on

3. Talent Retenon and Skill Shortages

4. Intensi ed Market Compe on

5. Rising Cybersecurity Threats

6. Business Disrup on from Global Uncertain es

7. Regulatory and Compliance Challenges

D. SEGMENT WISE PERFORMANCE

The Geographical Segment wise standalone and consolidated financial performance of the Company during the Year is as follows:

PARTICULARS	STANDALONE		CONSOLIDATED
	FY 2024-25	FY 2023-24	FY 2024-25	FY 2023-24
Segment Revenue
a) Domestic	24,821.72	18,741.59	24,892.54	18,741.59
b) Export	1,841.44	1,934.99	3,945.47	3,668.70
Total Sale/Income from Operations	26,663.16	20,676.58	28,838.01	22,430.29
Total Profit before Tax	3,041.47	2,129.14	2,992.19	2,152.64
Segment Assets
a) Domes c	16,805.64	11,941.61	13,233.20	9,462.02
b) Export	5,663.81	3,983.19	10,528.17	7,241.28
Unallocated Assets	552.05	502.57	555.25	505.57
Total Assets	23,021.50	16,427.37	24,316.61	17,208.87
Segments Liabili es
a) Domes c	20,850.76	15,086.60	21,558.92	15,561.15
b) Export	2,096.65	1,299.16	2,640.94	1,547.79
Unallocated Liabili es	74.09	41.61	116.75	99.93
Total Liabili es	23,021.50	16,427.37	24,316.61	17,208.87

E. OUTLOOK, RISKS AND CONCERNS

This sec on outlines forward-looking statements that involve risks and uncertain es. Actual results may differ materially from those an cipated due to various factors:

1. Impact of Outsourcing Restric ons

Global Policy Shis : Countries are increasingly implemen ng protec onist policies that restrict outsourcing of IT services to foreign en es. For instance, recent moves by financial ins tu ons to reduce reliance on external contractors in regions like China highlight the growing trend of reshoring technology operations . Implica ons for Indian IT Firms : Such policies could adversely affect Indian IT companies that rely heavily on interna onal outsourcing contracts, poten ally leading to reduced revenue streams and necessita ng strategic realignments.

2. Talent Acquisi on and Reten on Challenges

High Demand for Skilled Professionals : The IT industry faces intense compe on for skilled professionals, par cularly in emerging technologies such as AI, ML, and cybersecurity. This demand often leads to increased a ri on rates and challenges in maintaining a stable workforce. Impact on Operations : Difficulty in a rac ng and retaining top talent can result in project delays, increased recruitment costs, and poten al compromises in service quality, a ecng overall business performance.

3. Cybersecurity Threats

Sophis cated Cyber A acks : The rise of AI-powered cyber threats, including deepfakes and advanced phishing schemes, poses significant risks to organiza onal security. These threats are becoming more challenging to detect and migate. Regulatory Pressures : Governments worldwide are ghtening cybersecurity regula ons. For example, the EUs Cyber Resilience Act mandates stringent security requirements for digital products, impac ng companies compliance obliga ons. Resource Constraints : A global shortage of cybersecurity professionals exacerbates the challenge of defending against these evolving threats, leaving organiza ons vulnerable to poten al breaches.

4. Exchange Rate Vola lity

Fluctua ng Currency Values : Exchange rate uctua ons can significant ly impact the pro tability of interna onal contracts, especially those denominated in foreign currencies. Financial Implica ons : Adverse currency movements can lead to reduced margins on overseas projects and complicate financial planning and forecasng.

5. Market Dynamics and Compe ve Pressures

Changing Consumer Preferences : Rapid shis in market trends and consumer demands can affect the relevance of exis ng service offer ings, requiring connuous innova on and adapta on. Intensi ed Compe on : The prolifera on of both established players and new entrants in the IT sector increases compeve pressures, poten ally leading to price wars and margin compression.

6. Regulatory and Compliance Challenges

Evolving Legal Landscapes : Frequent changes in government regula ons, including data protec on laws and industry- specific compliance requirements, can create operational complexi es.

Compliance Costs : Adap ng to new regula ons oen necessitates significant investments in legal resources, system upgrades, and sta training, impac ng the companys bo om line.

7. Taxation Policies

Impact on Profit ability : Changes in taxa on policies, such as increased corporate tax rates or the introduc on of digital services taxes, can erode profit margins. Opera onal Adjustments : To mi gate tax-related impacts, the company may need to restructure operations , adjust pricing strategies, or relocate certain business func ons, leading to poten al disrup ons.

F. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established a strong and well-structured system of internal controls to ensure the orderly and efficient conduct of its operaons. These controls are designed to safeguard assets, maintain the integrity of financial data, and ensure compliance with applicable laws and regula ons. An Internal Financial Control Policy is in place to protect sensitive financial and operational informaon from unauthorized access or disclosure. The Company has implemented a con nuous monitoring mechanism that allows mely detec on and correc on of any devia ons or irregulari es. Through regular internal audits, reviews by the Audit Commiee, and pro active risk assessments, the Company con nuously strengthens its control environment, ensuring resilience and accountability across all levels of the organiza on.

G. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO

OPERATIONAL PERFORMANCE:

Financial Performance FY 2024-25 Comparison: Year-on-Year There is significant improvement in the financial performance of the company compared to last year. The total turnover of the company in current financial year is increased by 29 % i.e. from Rs. 20,925.03 lakh to Rs. 26,968.44 lakh. The Net profit a er Tax of the company is also increased significant ly by 43% from Rs. 1,582.74 lakh to Rs. 2,268.82 lakh. Whereas Profit before tax is increased by almost 43 % from Rs. 2,129.14 lakh to Rs. 3,041.47 lakh.

H. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL

RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED:

Human resource management plays a pivotal role in nurturing a skilled, mo vated, and collaborave workforce an essen al asset for any IT company. In a dynamic and knowledge-driven industry, each employees contribu on significant ly in uences innovaon, client sasfac on, and business success. Our HR strategy is centered around a racng, developing, and retaining top technology talent. We focus on recrui ng professionals who not only have the technical exper se and industry experience but also align with our organiza onal values and culture. By offer ing compe ve compensaon, a exible work environment, and clear career advancement opportuni es, we aim to foster high job sa sfac on and long-term engagement. Employee learning and development are core to our HR philosophy. We provide con nuous access to technical training, upskilling in emerging technologies (such as AI, cloud, and cybersecurity), and leadership development programs to keep our workforce future-ready. Regular performance reviews and construc ve feedback sessions help align individual goals with business objec ves and uncover paths for professional growth. To support a positive and efficient workplace, we ensure full compliance with employment laws and implement robust systems for managing payroll, benefit s, and HR administraon. We also encourage a collabora ve, inclusive, and innova on-driven culture, where knowledge-sharing and teamwork are active ly promoted. By invesng in our people, we aim to build a resilient, high-performing team that drives digital transformaon for our clients and sustains the companys long-term growth. The Company also have 50 appren ce trainees for its various departments during the year to provide them the technical training. As at March 31, 2025 there were total 764 Nos. of employees on the role of the Company.

I. DISCLOSURE OF ACCOUNTING TREATMENT:

The Company has prepared its financial statements in accordance with the prescribed Accounting Standards.

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:

During the year under review, there were significant changes in key financial ra os as provided under Current Ratio by 36.13 % due to mainly on account of higher short-term borrowings and other current obliga ons. Although current assets have also increased, the rise in current liabili es has been propor onately higher, resul ng in a reduced current ra o.

Debt Equity Ratio by 235 % due to a rise in borrowings to meet the funding requirements for business expansion and operational working capital. The shareholders equity remained rela vely constant, leading to a sharp increase in the ra o.

Debt Service Coverage Ratio by 93.58 % due to increase in Interest and Principle repayment during the year under review. While operatingprofits have improved, the higher repayment obliga ons resul ng from new borrowings have led to decline in the Debt service coverage capacity.

Trade payable ra o by 68.29 % due to higher net credit purchases during the year, coupled with a reduc on in average trade payables. This indicates faster payment cycles and improved management of supplier obliga ons.

Net capital turnover ra o by 25.81 % due to significant rise in revenue from operations , while the average working capital remained rela vely stable. This indicates improved efficiency influlitizing working capital to generate revenue and reflect s be er operational performance and capital management.

Cau onary statement

Statements in this Management Discussion and Analysis describing the Companys objec ves, projec ons, es mates and expecta ons may be forward looking within the meaning of applicable laws and regula ons. Actual results may differ from those expressed or implied. Important factors that could make a differ ence to the Companys operations include global economy, poli cal stability, stock performance on stock markets, changes in government regula ons, tax regimes, economic developments and other incidental factors. Except as required by law, the Company does not undertake to update any forward-looking statements to reflect future events or circumstances. Investors are advised to exercise due care and cau on while interpre ng these statements.