TechD Cybersecurity Ltd Management Discussions

OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

You should read the following discussion and analysis of financial condition and results of operations together with our financial statements included in this Red Herring Prospectus. The following discussion relates to our Company and is based on our restated financial statements. Our financial statements have been prepared in accordance with Indian GAAP, the accounting standards and other applicable provisions of the Companies Act.

Note: Statement in the Management Discussion and Analysis Report describing our objectives, outlook, estimates, expectations or prediction may be "Forward looking statement" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to our operations include, among others, economic conditions affecting demand/supply and price conditions in domestic and overseas market in which we operate, changes in Government Regulations, Tax Laws and other Statutes and incidental factors.

Established in 2017, Techdefence is a customer-centric cybersecurity solutions provider delivering end-to-end services to enterprises to help businesses stay secure in the digital world. Our company offers a comprehensive range of services, including Managed Security Services Provider (MSSP) solutions, Cyber Program Managed Services, Vulnerability Assessment and Penetration Testing (VAPT), Compliance Services, Specialised Services and Staff Augmentation Services tailored to meet diverse client needs.

Through our services, we empower organizations to protect their critical data, prevent cyber threats, and ensure smooth business operations. Our solutions are designed to eliminate data privacy risks, safeguarding businesses from unauthorized access and security breaches. At Techdefence, we are committed to providing reliable, customer-focused cybersecurity services to keep the business of clients safe.

As a CERT-In empanelled organization, we uphold the highest cybersecurity standards, serving clients across BFSI, NBFCs, Manufacturing, Healthcare, Aviation and Government Institutions. With a presence in both domestic and international markets, we cater to enterprises across industries, ensuring effective cybersecurity frameworks for businesses worldwide. Our clientele, including Adani Group, Zensar Technologies Limited, Astral Limited, Kedia Capital, 1 Cyber Valley, ETO GRUPPE Technologies GmbH, and IQM Corporation, benefits from our cutting-edge solutions that strengthen their cyber resilience.

As an ISO 27001 certified and Cert-In empanelled organization, Company have a well-defined Cyber Risk Management process in place and maintain a regularly updated Risk Register to track, assess, and mitigate cybersecurity risks effectively.

The driving force behind our company is its founders and Promoters, Mr. Sunny Vaghela and Mr. Piyush Rasiklal Vaghela. Mr. Sunny Vaghela, a recognized expert in the field of cybersecurity. With over a decade of expertise in cybersecurity, digital forensics, and threat mitigation, Mr. Vaghela has been instrumental in solving cybercrime cases, including cyber espionage, data theft, and assisting in investigations for the Ahmedabad serial bomb blasts and the 26/11 Mumbai attacks. His passion for addressing the growing challenges of digital threats led to the establishment of Techdefence, which is committed to providing reliable, and comprehensive cybersecurity solutions.

In addition to our technical expertise, our unique strength lies in its ability to generate cybersecurity talent by acting as a knowledge partner with universities. Through this collaboration, we contribute to capacity building by offering undergraduate and postgraduate courses, including B.Tech and M.Tech degrees in cybersecurity. These programs equip students with the expertise and skills needed to thrive in the ever-evolving field of cybersecurity, ensuring a strong pipeline of skilled professionals for the industry.

For further details, please refer to chapter titled “Our Business beginning on Page No. 116 of this Red Herring Prospectus.

We have consistently grown in terms of our revenues over the past years. In the recent periods our revenues from operation were Rs. 755.78 Lakhs in F.Y. 2022-23, Rs. 1,506.90 Lakhs in F.Y. 2023-24 and Rs. 2,979.52 Lakhs in F.Y 2024-25. Our Net Profit after tax for the above-mentioned periods were Rs. 94.11 Lakhs, Rs. 324.13 Lakhs and Rs. 839.61 Lakhs respectively.

(Rs. In Lakhs)

Particulars	For the year ended March 31
	2025	2024	2023
Revenue from Operations (Rs. in Lakhs)	2,979.52	1,506.90	755.78
Growth in Revenue from Operations (%)	97.73%	99.38%	214.46%
Other Income	43.13	28.88	2.73
Total Income (Rs. in Lakhs)	3,022.65	1,535.78	758.51
EBITDA (Rs. in Lakhs)	1,223.57	490.88	135.62
EBITDA Margin (%)	40.48%	31.96%	17.88%
Profit After Tax (Rs. in Lakhs)	839.61	324.12	94.11
PAT Margin (%)	28.18%	21.51%	12.45%
Net worth	2,213.78	480.16	156.04
Return on Net worth (%)	37.93%	67.50%	60.31%
Return on Equity Ratio (%)	62.33%	101.89%	86.35%
Return on Capital employed (%)	54.25%	72.07%	40.29%
Debt to equity ratio	0.01	0.38	1.05

1. Revenue from operations represents the revenue from sale of service & product& other operating revenue of our Company as recognized in the Restated financial information.

2. Total income includes revenue from operations and other income.

3. EBITDA means Earnings before interest, taxes, depreciation and amortization expense, which has been arrived at by obtaining the profit before tax/ (loss) for the year / period and adding back interest cost, depreciation, and amortization expense.

4. EBITDA margin is calculated as EBITDA as a percentage of total income.

5. Profit After Tax represents the restated profits of the Company after deducting all expenses.

6. PAT Margin (%) is calculated as Profit for the year/period as a percentage of Revenue from Operations.

7. Net worth represents total shareholders funds including reserves and surplus.

8. Return on net worth is calculated as Restated profit for the year divided by Total net worth.

9. Return on Equity is calculated as Net profit after tax, as restated, attributable to the owners of the Company for the year/period divided by average Equity. Average equity is calculated as average of opening and closing balance of total equity (Shareholders funds) for the year.

10. Return on capital employed calculated as Earnings before interest and taxes divided by capital employed as at the end ofrespective period/year. (Capital employed calculated as the aggregate value of total equity, total debt and deferred tax liabilities reduced by Intangible assets)

Debt- equity ratio is calculated by dividing total debt by total equity. Total debt represents long-term and short-term borrowings. Total equity is the sum of share capital and reserves & surplus

Our Companys future results of operations could be affected potentially by the following factors:

Except as otherwise stated in this Red Herring Prospectus and the Risk Factors given in the Red Herring Prospectus, the following important factors could cause actual results to differ materially from the expectations include, among others:

Regulatory Framework

We have obtained all regulatory permissions which are necessary to run our business, Further, some of the approvals are granted for fixed periods of time and need renewals, which are obtained in the course of business,

however, there may be change in statutory regulations at any time which cannot be predicted by us. There can be no assurance that the change in regulations will not impact our operations in the future.

Ability of Management

Our success depends on the continued services and performance of the members of our management team and other key employees. Competition for senior management in the industry is intense, and we may not be able to retain our existing senior management or attract and retain new senior management in the future. The loss of any member of our senior management or other key personnel may adversely affect our business, results of operations and financial condition.

Market & Economic conditions

India is one of the largest economies and is growing at a rapid pace. But in this globalised economy, all the businesses face an uncertain level of volatility from unexpected global events which ranges from global pandemics to wars, to weather changes to supply chain disruption, which may change the economic dynamics and the purchasing capability of the end customers. At the time of market slowdown, the demand falls which has adverse impact on our business.

Competition

We compete with a range of players in the highly competitive cybersecurity industry, including large multinational corporations as well as specialized boutique firms. The market is characterized by price wars, rapid technological advancements, and the constant need for innovation to stay ahead of evolving cyber threats. These factors present significant challenges for our company, as they can erode profit margins and make it difficult to differentiate our offerings.

Significant Developments after March 31, 2025 that may affect our Future Results of Operations

The Directors confirm that there have been no other events or circumstances since the date of the last financial statements as disclosed in the Red Herring Prospectus which materially or adversely affect or is likely to affect the business or profitability of our Company or the value of our assets, or our ability to pay liabilities within next twelve months.

BASIS OF ACCOUNTING AND PREPARATION OF FINANCIAL STATEMENTS

The restated summary statement of assets and liabilities of the Company as at March 31, 2025, March 31, 2024 and 2023 and the related restated summary statement of profits and loss and cash flows for the year ended March 31, 2025, March 31, 2024 and 2023 (herein collectively referred to as (“Restated Summary Statements”) have been compiled by the management from the audited Financial Statements of the Company for the year/period ended on March 31, 2025, March 31, 2024 and 2023 approved by the Board of Directors of the Company. Restated Summary Statements have been prepared to comply in all material respects with the provisions of Part I of Chapter III of the Companies Act, 2013 (the “Act”) read with Companies (Prospectus and Allotment of Securities) Rules, 2014, Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (“ICDR Regulations”) issued by SEBI and Guidance note on Reports in Companies Prospectuses (Revised 2019) (“Guidance Note”). Restated Summary Statements have been prepared specifically for inclusion in the offer document to be filed by the Company with the NSE in connection with its proposed SME IPO. The Companys management has recast the Financial Statements in the form required by Schedule III of the Companies Act, 2013 for the purpose of restated Summary Statements.

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act"), as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles in India.

All assets and liabilities have been classified as current or non-current as per the Companys normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has determined its operating cycle as twelve months for the purpose of current - non-current classification of assets and liabilities.

USE OF ESTIMATES

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

PROPERTY, PLANT & EQUIPMENT AND INTANGIBLE ASSETS

(i) Property, Plant & Equipment

All Property, Plant & Equipment are recorded at cost including taxes, duties, freight and other incidental expenses incurred in relation to their acquisition and bringing the asset to its intended use.

Gains or losses arising from de-recognition of Property, Plant and Equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is de-recognised.

(ii) Intangible Assets

Intangible Assets are stated at acquisition cost, net of accumulated amortization and accumulated impairment losses, if any.

DEPRECIATION / AMORTISATION

Depreciation on fixed assets is calculated on a Straight line method using the rates arrived at based on the useful lives estimated by the management, or those prescribed under the Schedule II to the Companies Act, 2013. Individual assets cost of which doesnt exceed Rs. 5,000/- each are depreciated in full in the year of purchase.

Intangible assets including internally developed intangible assets are amortised over the year for which the company expects the benefits to accrue. Intangible assets are amortized on straight line method basis over 5 years in pursuance of provisions of AS-26.

IMPAIRMENT OF ASSETS

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. Recoverable amount is the higher of an assets net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from sale of the asset in an arms length transaction between knowledgeable, willing parties, less the costs of disposal. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of the recoverable value.

FOREIGN CURRENCY TRANSLATIONS

Income and expense in foreign currencies are converted at exchange rates prevailing on the date of the transaction. Monetary items denominated in foreign currencies at the year-end are re-stated at the year end rates. Non Monetary foreign currency items are carried at cost. Any income or expense on account of exchange difference either on settlement or on translation at the balance sheet date is recognized in Profit & Loss Account in the year in which it arises.

BORROWING COSTS

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are recognised in Statement of Profit and Loss in the period in which they are incurred.

PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provision involving substantial degree of estimation in measurement is recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

REVENUE RECOGNITION

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized:

Revenue is recognized as services are rendered in accordance with the terms of the contract with the customers. Services rendered Income has been recognized as and when the services are rendered to the customers and when there is a reasonable certainty of its ultimate realisation/collection.

Revenue from services comprise income from fixed price contracts and time and material contracts. Revenue from fixed price contracts is recognized over the period of the contracts using the percentage of completion method. Revenue from time and material contracts is recognized when the services are rendered in accordance with the terms of contracts.

Revenues are stated net of trade discounts. Sale of services or products to customers outside India is considered as exports.

OTHER INCOME

Interest Income on fixed deposit is recognized on time proportion basis. Other Income is accounted for when right to receive such income is established.

TAXES ON INCOME

Income taxes are accounted for in accordance with Accounting Standard (AS-22) - “Accounting for taxes on income”, notified under Companies (Accounting Standard) Rules, 2021. Income tax comprises of both current and deferred tax.

Current tax is measured on the basis of estimated taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. They are measured using substantially enacted tax rates and tax regulations as of the Balance Sheet date.

Deferred tax assets arising mainly on account of brought forward losses and unabsorbed depreciation under tax laws, are recognized, only if there is virtual certainty of its realization, supported by convincing evidence. Deferred tax assets on account of other timing differences are recognized only to the extent there is a reasonable certainty of its realization.

CASH AND BANK BALANCES

Cash and cash equivalents comprises Cash-in-hand, Current Accounts, Fixed Deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to

insignificant risk of changes in value. Other Bank Balances are short-term balance (with original maturity is more than three months but less than twelve months).

EARNINGS PER SHARE

Basic earning per share is computed by dividing the profit/ (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity share outstanding during the year. Diluted earning per share is computed by dividing the profit/ (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.

OPERATING LEASES

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item are classified as operating leases. Operating lease payments are recognized as an expense in the statement of profit and loss on a straight-line basis over the lease term

EMPLOYEE BENEFITS

Defined Contribution Plan:

Defined contribution plans are those plans in which the company pays fixed contribution into separate entities and will have no legal or constructive obligation to pay further amounts. Provident Fund and Employee State Insurance are Defined Contribution Plans in which company pays a fixed contribution and will have no further obligation beyond the monthly contributions and are recognised as an expense in Statement of Profit & Loss.

Defined Benefit Plan:

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service without any monetary limit. Vesting occurs upon completion of five years of service. Provision for gratuity has been made in the books as per actuarial valuation done as at the end of the year.

SEGMENT REPORTING

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment. Inter-segment revenue is accounted on the basis of transactions which are primarily determined based on market / fair value factors. Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment.

Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under “unallocated revenue / expenses / assets / liabilities”.

MATERIAL EVENTS

Material events occurring after the Balance Sheet date in relation to conditions existing as at the Balance Sheet date is taken into cognizance.

RESULTS OF OUR OPERATIONS

Particulars	For the year ended March 31, 2025	% of Total**	For the year ended March 31, 2024	% of Total**	For the year ended March 31, 2023	% of Total**
INCOME
Revenue from Operations	2,979.52	98.57%	1,506.90	98.12%	755.78	99.64%
Other Income	43.13	1.43%	28.88	1.88%	2.73	0.36%
Total Income (A)	3,022.65	100.00%	1,535.78	100.00%	758.51	100.00%
EXPENDITURE
Direct Expenses	813.56	26.92%	287.17	18.70%	234.92	30.97%
Employee benefits expense	811.62	26.85%	649.84	42.31%	285.65	37.66%
Finance costs	49.24	1.63%	41.67	2.71%	5.36	0.71%
Depreciation and amortization expense	44.95	1.49%	14.26	0.93%	6.50	0.86%
Other expenses	167.85	5.55%	103.48	6.74%	100.00	13.18%
Total Expenses (B)	1,887.22	62.44%	1,096.42	71.39%	632.43	83.38%
Profit before tax (A-B)	1,135.43	37.56%	439.36	28.61%	126.08	16.62%
Tax Expense/ (benefit)
(i) Current tax	286.16	9.55%	118.16	7.69%	32.41	4.27%
(ii) Deferred tax expenses/(credit)	9.66	0.32%	(2.92)	-0.19%	(0.44)	-0.06%
Net tax expense / (benefit)	295.82	9.87%	115.24	7.50%	31.97	4.21%
Profit for the year	839.61	27.69%	324.12	21.10%	94.11	12.41%
**Total refers to Total Revenue

Components of our Profit and Loss Account Income

Our total income comprises of revenue from operations and other income.

Revenue from Operations

Our revenue from operations as a percentage of our total income was 98.57%, 98.12%, 99.64% for the Financial Years ended March 31, 2025, March 31, 2024, and March 31, 2023 respectively.

(Rs. In Lakhs)

Particulars	For the year ended March 31 , 2025	For the year ended March 31, 2024	For the year ended March 31, 2023
Sale of services
- Sale of software & IT enabled Services	2,956.39	1,298.66	607.99
- Income from Commercial Training and Coaching Services	23.13	208.24	147.79
TOTAL	2,979.52	1,506.90	755.78

Other Income

Our Other Income primarily consists of Interest Income on FD, Interest income on loan given, Interest on Income Tax Refund and Foreign Exchange Fluctuation etc.

(Rs. In Lakhs)

Particulars	For the year ended March 31,2025	For the year ended March 31, 2024	For the year ended March 31, 2023
Interest Income on FD	21.77	15.78	1.29
Interest income on loan given	11.94	13.10	-
Discount received	7.66	-	-
Miscellaneous Income	-	-	1.15
Interest on Income Tax Refund	-	-	0.11
Foreign Exchange Fluctuation	1.75	-	0.18
TOTAL	43.13	28.88	2.73

Expenditure

Our total expenditure primarily consists of Direct Expenses, Employee benefit expenses, Finance costs, Depreciation & Amortization Expenses and Other Expenses.

Direct Expenses

Our direct expenses comprises of Consulting Fees Expenses, Communication Expenses and Purchase of software & lT enabled Services.

Employee Benefit Expenses

Our employee benefits expense comprises of Salary and other incentives, Gratuity Expenses, Director Remunerations, Staff Welfare Expense and Contribution to Provident Fund & ESIC.

Finance costs

Our Finance cost expenses Bank Charges, Interest expenses on borrowings, Loan Processing Charges and Interest on Income Tax and TDS.

Other Expenses

Other expenses primarily include Legal & Professional Fees, Marketing & Business Promotion Expenses, Repairs & Maintenance Expenses, Sundry Balances Written off, Travelling and Conveyance Expenses, General Expenses, Rent and Electricity Expenses.

In Lakhs)

Particulars	For the year ended March 31 , 2025	For the year ended March 31, 2024	For the year ended March 31, 2023
Payment To Auditor	3.00	0.30	0.30
Foreign Exchange Fluctuation loss	-	0.19	-
Legal & Professional Fees	23.81	4.93	1.85
Advertisement & Sales Promotion Expenses	48.28	-	-
Marketing & Business Promotion Expenses	0.04	11.30	9.10
Rates & Taxes	4.89	2.43	1.32
Repairs & Maintenance Expenses	3.31	1.38	10.97
Sundry Balances Written off	-	-	12.05
Travelling and Conveyance Expenses	43.59	30.98	34.19
General Expenses	23.40	15.74	8.35
Stationery, printing and postage expenses	6.01	2.23	0.49
Donation	-	0.90	-
Insurance Charges	0.16	0.01	-
Penalty Expenses	-	0.19	-
Certification Course Expenses	-	0.30	-
Commission and Brokerage charges	2.51	2.58	-
Electricity Expenses	8.85	5.01	4.01
Rent	-	25.01	17.37
TOTAL	167.85	103.48	100.00

Provision for Tax

The provision for current taxation is computed in accordance with relevant tax regulation. Deferred tax is recognized on timing differences between the accounting and the taxable income for the year and quantified using the tax rates and laws enacted or subsequently enacted as on balance sheet date. Deferred tax assets are recognized and carried forward to the extent that there is a virtual certainly that sufficient future taxable income will be available against which such deferred tax assets can be realized in future.

Fiscal 2025 compared with fiscal 2024 Revenue from Operations

The revenue from operations of our company for Fiscal 2025 was ? 2,979.52 Lakhs against ? 1,506.90 Lakhs revenue from operations for Fiscal 2024. An increase of 99.38% in revenue from operations was due to the increase of 99.38% in revenue from operations was primarily driven by strong growth in new client acquisitions, higher business from existing customers, and expansion across key verticals such as BFSI and Education during Fiscal 2025.

Other Income

The other income of our company for Fiscal 2025 was ? 43.13 Lakhs against ? 28.88 Lakhs other income for Fiscal 2024. An increase of 49.34% in other income was due to primarily the increase of 49.34% in other income was primarily due to foreign exchange gain and interest income from director and group company during Fiscal 2025.

Total Income

The total income of our company for Fiscal 2025 was ? 3,022.65 Lakhs against ? 1,535.78 Lakhs total income for Fiscal 2024. An increase of 96.82% in total income was due to the increase of 96.82% in total income was due to significant growth in revenue from operations along with higher other income during Fiscal 2025.

Expenditure

Direct Expenses

In Fiscal 2025, our company incurred direct expenses of ? 813.56 Lakhs against ? 287.17 Lakhs in Fiscal 2024. An Increase of 183.30% was due to the increase of 183.30% in direct expenses was due to higher project execution costs, increased subcontracting, and procurement of licenses to support the growth in revenue during Fiscal 2025.

Employee Benefit Expenses

In Fiscal 2025, our company incurred employee benefits expenses of ? 811.62 Lakhs against ? 649.84 Lakhs expenses in Fiscal 2024. An increase of 24.90% was due to the increase of 24.90% in employee benefit expenses was due to annual increments, hiring of additional manpower, and higher staff welfare costs during Fiscal 2025.

Finance Costs

The finance costs for Fiscal 2025 were ? 49.24 Lakhs while they were ? 41.67 Lakhs for Fiscal 2024. An increase of 18.17% was due to the increase of 18.17% in finance costs was due to higher interest on borrowings, utilisation of working capital facilities, and interest on statutory dues such as GST, TDS and Income Tax during Fiscal 2025.

Other Expenses

In Fiscal 2025, our other expenses were ? 167.85 Lakhs and ? 103.48 Lakhs in Fiscal 2024. An increase of 62.21% This marginal rise was primarily driven by This marginal rise of 62.21% in other expenses was primarily driven by higher administrative costs, professional fees, business events, and business traveling expenses during Fiscal 2025.

Profit/ (Loss) before Tax

Our company had reported a profit before tax for Fiscal 2025 of ? 1,135.43 Lakhs against a profit before tax of ? 439.36 Lakhs in Fiscal 2024. An increase of 158.43% was primarily due to The increase of 158.43% in profit before tax in Fiscal 2025 as compared to Fiscal 2024 was primarily attributable to the substantial growth in revenue from operations across BFSI, Education and other key verticals, improved operational efficiency through better cost management, and higher contribution from other income, including foreign exchange gains and interest income from director and group company.

Profit/ (Loss) after Tax

Profit after tax for Fiscal 2025 was ? 839.61 Lakhs against a profit after tax of ? 324.12 Lakhs in Fiscal 2024. An increase of 158.26%. This growth was primarily driven by the increase of 158.26% in profit after tax in Fiscal 2025 as compared to Fiscal 2024 was primarily driven by substantial growth in revenue from operations, improved cost efficiencies, higher other income, and overall strengthening of operating margins.

Fiscal 2024 compared with fiscal 2023 Revenue from Operations

The revenue from operations of our company for Fiscal 2024 was ? 1,506.90 Lakhs against ? 755.78 Lakhs revenue from operations for Fiscal 2023. An increase of 99.38% in revenue from operations was due to primarily driven by higher sales in Educational Services, increased demand for Export Services, and the strategic expansion of our VAPT, Cyber Audit, Compliance Audit services beyond Gujarat and enhanced revenue generation from the sale of Diploma ISO courses.

Other Income

The other income of our company for Fiscal 2024 was ? 28.88 Lakhs against ? 2.73 Lakhs other income for Fiscal 2023. An increase of 957.88% in other income was due to primarily attributable to a surge in interest income from Fixed Deposit Receipts (FDR).

Total Income

The total income of our company for Fiscal 2024 was ? 1,535.78 Lakhs against ? 758.51 Lakhs total income for Fiscal 2023. An increase of 102.47% in total income was due to predominantly driven by higher sales in Educational Services, increased demand for Export Services, and the strategic expansion of our VAPT, Cyber Audit, Compliance Audit services beyond Gujarat and surge in interest income from Fixed Deposit Receipts (FDR) and enhanced revenue generation from the sale of Diploma ISO courses.

Expenditure

Direct Expenses

In Fiscal 2024, our company incurred direct expenses of ? 287.17 Lakhs against ? 234.92 Lakhs in Fiscal 2023. A Increase of 39.63% was due to primarily driven by higher expenditures on service procurement, software acquisitions, and consultancy fees.

Employee Benefit Expenses

In Fiscal 2024, our company incurred employee benefits expenses of ? 649.84 Lakhs against ? 285.65 Lakhs expenses in Fiscal 2023. An increase of 127.50% was due to mainly driven by workforce expansion, higher statutory fund contributions, and increased staff welfare expenditures.

Finance Costs

The finance costs for Fiscal 2024 were ? 41.67 Lakhs while they were ? 5.36 Lakhs for Fiscal 2023. An increase of 677.43% was due to increase in finance cost is mainly due to primarily driven by higher bank commission expenses, including loan processing fees, as well as increased interest costs on unsecured loans.

Other Expenses

In Fiscal 2024, our other expenses were ? 103.48 Lakhs and ? 100.00 Lakhs in Fiscal 2023. An increase of 3.48% This marginal rise was primarily driven by higher expenditures on rent, marketing, advertising, business promotion, travel, and insurance costs.

Profit/ (Loss) before Tax

Our company had reported a profit before tax for Fiscal 2024 of ? 439.36 Lakhs against a profit before tax of ? 126.08 Lakhs in Fiscal 2023. An increase of 248.48% was driven by growth in the Education Services sector, addition of new clients, higher sales volume, and improved profit margins.

Profit/ (Loss) after Tax

Profit after tax for Fiscal 2024 was ? 324.12 Lakhs against a profit after tax of ? 94.11 Lakhs in Fiscal 2023. An increase of 244.42% This growth was primarily driven by a significant improvement in profit margins within our training and educational services.

Cash Flows

(Rs. in Lakhs)

Particulars	For the year ended March 31,
	2025	2024	2023
Net Cash Flow from/(used in) Operating Activities	(238.30)	(116.28)	1.08
Net Cash Flow from/(used in) Investing Activities	(262.21)	(0.81)	(24.83)
Net Cash Flow from/(used in) Financing Activities	695.43	(25.01)	158.73

Note: Please refer Risk Factor on page 34 “We have had negative cash flows from Operating activities in the past in some of the recent years” for more information.

Cash Flows from Operating Activities

1. For the year ended March 31, 2025, net cash used in operating activities was t 238.31 Lakhs. This comprised of the profit before tax of t 1,135.43 Lakhs, which was primarily adjusted for depreciation and amortization expenses of t 44.95 Lakhs, Interest income of t 21.77 Lakhs, Unrealised foreign exchange fluctuation of t 3.67 Lakhs, Finance Cost t 49.24 Lakhs, and Gratuity Provision of t 7.21 Lakhs.

The resultant operating profit before working capital changes was t 1,218.73 Lakhs, which was primarily adjusted for an increase in loans and advances of t 78.27 Lakhs, increase in trade receivables during the year of t 1,046.95 Lakhs, increase in other assets (including other bank balances) of t 598.46 Lakhs, increase in trade payables during the year of t 266.74 Lakhs, and increase in other current liabilities & provisions during the year of t 22.02 Lakhs.

Cash used in Operations was t 59.64 Lakhs, which was reduced by Direct Tax paid for t 178.66 Lakhs, resulting in a net cash used in operating activities of t 238.30 Lakhs.

2. For the year ended March 31, 2024, net cash used in operating activities was t 116.28 Lakhs. This comprised of the profit before tax of t 439.36 Lakhs, which was primarily adjusted for depreciation and amortization expenses of t 14.26 Lakhs, Interest income of t 15.78 Lakhs, Finance Cost t 41.67 Lakhs, and Gratuity Provision of t 10.46 Lakhs.

The resultant operating profit before working capital changes was t 489.97 Lakhs, which was primarily adjusted for an increase in loans and advances of t 73.81 Lakhs, increase in trade receivables during the year of t 139.58 Lakhs, increase in other assets (including other bank balances) of t 139 Lakhs, decrease in trade payables during the year of t 158.00 Lakhs, and increase in other current liabilities & provisions during the year of t 1.29 Lakhs.

Cash used in Operations was t 18.94 Lakhs, which was reduced by Direct Tax paid for t 97.34 Lakhs, resulting in a net cash flow used in operating activities of t 116.28 Lakhs.

3. In the year ended March 31, 2023, net cash generated from operating activities was t 1.08 Lakhs. This comprised of the profit before tax of t 126.08 Lakhs, which was primarily adjusted for depreciation and amortization expenses of t 6.50 Lakhs, Interest income of t 2.55 Lakhs, Finance Cost t 5.36 Lakhs, Sundry balances written off of t 12.05 Lakhs, and Gratuity Provision of t 4.05 Lakhs.

The resultant operating profit before working capital changes was t 151.49 Lakhs, which was primarily adjusted for an increase in loans and advances of t 56.64 Lakhs, decrease in trade receivables during the year of t 12.63 Lakhs, increase in other assets (including other bank balances) of t 314.64 Lakhs, increase in trade payables during the year of t 185.49 Lakhs, and increase in other current liabilities & provisions during the year of t 55.38 Lakhs.

Cash Generated from Operations was t 33.71 Lakhs, which was reduced by Direct Tax paid for t 32.63 Lakhs, resulting in a net cash flow generated from operating activities of t 1.08 Lakhs.

Cash Flows from Investment Activities

1. In FY 2025, net cash used in investing activities was t 262.21 Lakhs, which primarily comprised of cash used for Purchase of property, plant & equipment and intangible assets of t 283.43 Lakhs and Interest Income Received of t 21.22 Lakhs.

2. In FY 2024, net cash used in investing activities was t 0.81 Lakhs, which primarily comprised of cash used for Purchase of property, plant & equipment and intangible assets of t 16.59 Lakhs and Interest Income Received of t 15.78 Lakhs.

3. In FY 2023, net cash used in investing activities was t 24.83 Lakhs, which primarily comprised of cash used for Purchase of property, plant & equipment and intangible assets of t 27.38 Lakhs and Interest Income Received of t 2.55 Lakhs.

1. In FY 2025, net cash used for financing activities was t 695.43 Lakhs, which predominantly comprised of repayment of Borrowings of t 149.34 Lakhs, Proceeds from issue of shares of t 894.01 lakhs and Finance Cost Paid of t 49.24 Lakhs.

2. In FY 2024, net cash used for financing activities was t 25.01 Lakhs, which predominantly comprised of Proceeds from Borrowings of t 16.66 Lakhs and Finance Cost Paid of t 41.67 Lakhs.

3. In FY 2023, net cash flow from financing activities was t 158.73 Lakhs, which predominantly comprised of Proceeds from Borrowings of t 164.09 Lakhs and payment of finance cost of t 5.36 Lakhs.

1. Unusual or infrequent events or transactions

Except as described in this Red Herring Prospectus, to our knowledge, there have been no unusual or infrequent events or transactions that have in the past or may in the future affect our business operations or future financial performance.

2. Significant economic changes that materially affected or are likely to affect income from continuing Operations

Our business has been subject, and we expect it to continue to be subject to significant economic changes arising from the trends identified above in ‘Factors Affecting our Results of Operations and the uncertainties described in the section entitled “Risk Factors” beginning on page no. 34 of the Red Herring Prospectus. To our knowledge, except as we have described in the Red Herring Prospectus, there are no known factors which we expect to bring about significant economic changes.

3. Known trends or uncertainties that have/had or are expected to have a material adverse impact on revenue or income from continuing operations

Apart from the risks as disclosed under Chapter titled “Risk Factors” beginning on page no. 34 in this Red Herring Prospectus, in our opinion there are no other known trends or uncertainties that have had or are expected to have a material adverse impact on revenue or income from continuing operations.

4. Future changes in relationship between costs and revenues, in case of events such as future increase in labour or material costs or prices that will cause a material change are known

Our Companys future costs and revenues will be determined by demand/supply situation and government policies.

5. Extent to which material increases in net sales or revenue are due to increased sales volume, introduction of new products or increased sales prices.

Increases in revenues are by and large linked to increases in volume of business.

6. Total turnover of each major industry segment in which the issuer company operated.

Our company is operating in Cyber Security Industry. Relevant Industry data and, as available, has been included in the chapter titled “Industry Overview” beginning on page no. 104 of this Red Herring Prospectus.

7. Status of any publicly announced new products or business segment.

Except as disclosed elsewhere in the Red Herring Prospectus, we have not announced any new products or business segments.

8. The extent to which business is seasonal.

Our Companys business is not seasonal in nature.

9. Any significant dependence on a single or few suppliers or customers.

As details provided in the RHP there is no dependency in the single or few suppliers or customers.

10. Competitive conditions:

We face competition from existing and potential competitors which is common for any business. We have, over a period, developed certain competitors who have been discussed in chapter titles “Business Overview” beginning on page no. 116 of this Red Herring Prospectus.