Your directors are pleased to present the 9^th Board''s Report on the business and operations of the Company, together with the
audited financial statements for the financial year ended March 31,2026 ("FY-2026").

This is the first Board''s Report of the Company following its Initial Public Offer ("IPO") and the listing of its equity shares on
BSE Limited ("BSE") and National Stock Exchange of India Limited ("NSE") (BSE and NSE hereinafter collectively referred to
as the "Stock Exchanges"). The Board is pleased to present an overview of the Company''s performance, key developments and
business operations during the financial year under review.

COMPANY OVERVIEW

Your Company operates in the Indian rooftop solar industry, manufacturing and supplying a comprehensive range of solar products
including solar panels, inverters and batteries. With a focus on innovation and R&D, your Company has a history of developing
various technologies, including its patented rMPPT technology and offers a wide product portfolio under "UTL Solar" and "Fujiyama
Solar" brands. Our Company currently operates five manufacturing facilities (including Bawal Facility, where fire incident took place
post closure of FY) with its distribution network across India with 950 distributors, 6,800 dealers and 1,150 exclusive "Shoppe"
franchisees.

FINANCIAL SUMMARY AND PERFORMANCE OF THE COMPANY

The financial highlights of your Company for the financial year ended 31^st March, 2026, and for the previous financial year ended
31^st March, 2025, are as follows;

OVERVIEW AND STATE OF AFFAIRS, OPERATIONS
AND FUTURE OUTLOOK

During the financial year under review, the Company continued
to strengthen its business operations and financial position.
The Company''s total income increased from ?15,500.92 million
in the previous financial year to ?26,600.27 million, while profit
after tax increased from ?1,563.35 million to ?3,041.25 million
during the year under review.

The Company continued to focus on strengthening its core
operations, expanding its business presence and enhancing
operational efficiencies. During the year, the Company
undertook various initiatives towards supporting its business
growth and long-term strategic objectives.

The Company remains focused on sustainable and profitable
growth and will continue to pursue opportunities aligned with
its business objectives, while maintaining a prudent approach
towards operational and business risks.

A detailed discussion on the state of affairs, business operations,
performance, industry outlook and future prospects of the
Company is provided in the Management Discussion and
Analysis ("MD&A"), forming part of this Annual Report.

TRANSFER TO RESERVE

During FY 2025-26, the Company has retained the profit for the
year in Retained Earnings. The balance of Retained Earnings
stood at C5761.47 million as at March 31, 2026, as compared
to C2722.03 million as at March 31, 2025. No amount
was specifically transferred to any other reserve during the
financial year.

DIVIDEND AND DIVIDEND DISTRIBUTION POLICY

The Board of Directors ("Board"), after considering holistically
the relevant circumstances and keeping in view of the
continuous need of funds for the increased size of operations
and tremendous growth opportunities which shall create value
for the shareholders, has decided that it would be prudent not
to recommend any dividend for the financial year 2025-26.

In accordance with the provisions of the Companies Act, 2013
and the Regulation 43A SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (SEBI Listing Regulations), the
Company has framed and adopted a Dividend Distribution
Policy, which is accessible at the website of the Company
athttps://www.utlsolarfuiivama.com/investor-relations/
governance/.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR
EDUCATION AND PROTECTION FUND

Since, there was no Dividend declared and paid in the previous

years, the provisions of Section 125 of the Act do not apply.

DETAILS PERTAINING TO SHARES IN THE SUSPENSE
ACCOUNT

During FY 2026, There was no share which was lying in the
unclaimed suspense account or any other escrow account.

SHARE CAPITAL

a) Status of listing of Equity Shares of the Company

The equity shares of the Company were listed on the Stock
Exchanges on November 20, 2025 and are compulsorily tradable
in electronic form. As on March 31,2026, entire (i.e. 100%) paid
up share capital representing 306.41 Million Equity Shares of
C1/- (Rupee One Only) each are in dematerialized form.

b) Authorised Share Capital

As on March 31, 2026, the authorised share capital of the
Company is ?1,250 Million divided into 1,250 Million equity
shares of C1/- (Rupee One Only) each.

c) Allotment of Securities

During the year under review, 26.32 Million equity shares of
face value of C1/- (Rupee One Only) each were allotted by the
Company pursuant to the fresh issue made as part of the Initial
Public Offer ("IPO"), at an Offer Price of C228/- (Rupees Two
Hundred and Twenty Eight Only) per equity share including
a share premium of C227/- (Rupees Two Hundred and Twenty
Seven) per equity share, aggregating to approximately ?6,000
million.

The IPO comprised a fresh issue of 26,315,789 equity shares
by the Company and an offer for sale of 10,000,000 equity
shares by the Selling Shareholders, aggregating to 36,315,789
equity shares.

Except as stated above, the Company has not issued or allotted
any other equity shares or securities convertible into equity
shares, or any shares with differential rights as to dividend,
voting or otherwise, during FY 2025-26. Further, the Company
has neither issued any sweat equity shares nor granted any
stock options under any scheme during FY 2025-26.

CHANGE IN THE NATURE OF BUSINESS

There has been no change in the nature of business of the
Company during the financial year ended March 31,2026.

REVISION OF FINANCIAL STATEMENTS

There was no revision of the financial statements for the year
under review.

MATERIAL EVENT

> Initial Public Offer

During the year under review, the Company successfully completed its Initial Public Offer ("IPO"), comprising a fresh issue
of equity shares by the Company and an Offer for Sale ("OFS") by the Selling Shareholders. The key details of the IPO are set

m it holr»iA/*

> Utilization of Proceeds of Initial Public Offer

The Company places before the Audit Committee, on
a quarterly basis, the utilisation of the proceeds of the
Fresh Issue from the IPO as part of the quarterly review
of financial results. The Company has appointed CARE
Ratings Limited as the Monitoring Agency in terms of
Regulation 41 of the Securities and Exchange Board of
India (Issue of Capital and Disclosure Requirements),
Regulations 2018 ("ICDR Regulations"), as amended from
time to time, to monitor the utilization of IPO proceeds.

The Company has received the quarterly Monitoring
Agency Reports from CARE Ratings Limited for the
quarters ended December 31, 2025, March 31, 2026
and June 30, 2026, dated February 12, 2026, May 14,
2026 and August 13, 2026, respectively. The Monitoring
Agency Reports confirmed that there was no deviation or
variation in the utilisation of the Fresh Issue proceeds from
the objects stated in the Prospectus. The Company has
submitted the requisite statements of deviation/variation
and the Monitoring Agency Reports to BSE Limited and
National Stock Exchange of India Limited, as applicable,
in accordance with Regulation 32 of the SEBI Listing
Regulations.

> Inspection and Seizure by Bureau of Indian Standards
(BIS)

On 24 March 2026, inspection and search was conducted
by Bureau of Indian Standards (BIS) at the Company''s
production facility located in Ecotech Extension-1,
Greater Noida, Uttar Pradesh.

Upon conclusion of the inspection, BIS seized certain
products worth D24.50 million alleging that the Company
is not in compliance with BIS standards.

Further, another inspection was carried out at the facility
located in Bawal, District Rewari, Haryana on 28 April

2026 wherein goods worth D19 million were seized by
BIS on the above grounds. The Company has sought legal
advice in this regard and, based on the legal advice as well
as on management assessment, the Company believes
it has adhered to all the requirements of the BIS Act,
2016 and that all the seized goods meet the standard
requirements. The Company has filed its submission with
BIS and awaiting further response in this regard.

EVENTS SUBSEQUENT TO THE END OF REPORTING
FINANCIAL YEAR

> Allotment of Equity Shares pursuant to Employee
Stock Option Scheme, 2023

The Company on 25 April, 2026 has allotted 490,828
(Four Lakh Ninety Thousand Eight Hundred Twenty-
Eight) equity shares of face value C1/- (Rupee One Only)
each pursuant to the exercise of stock options granted
under the Employee Stock Option Scheme, 2023 on the
following terms:

1) 4,46,803 Equity Shares shall be allotted at an exercise
price of C91.03/- per share, comprising face value of C1/-
and a premium of C90.03/- per share; and

2) 44,025 Equity Shares shall be allotted at an exercise
price of C 175.34/- per share, comprising face value of C1/-
and a premium of C174.34/- per share.

> Acquisition of Additional Equity Interest in Zayo Ca¬
bles Private Limited and Zayo Energy Private Limited

The Company on May 07, 2026 acquired an additional
31% equity stake in each of Zayo Cables Private Limited
and Zayo Energy Private Limited in which the Company
already held a 19% equity interest. Pursuant to aforesaid
acquisition, the Company''s equity interest in each of the
said companies has increased from 19% to 50%.

> Fire Incident at the Company''s Bawal Manufacturing
Facility

On 6 May 2026, a major fire broke out at one of the
Company''s production facility located in Bawal, District
Rewari, Haryana. The incident resulted in damage to
building structures, machinery, inventory and other
assets with an estimated carrying value of C 1,435.81
million. The Company has adequate insurance coverage
and has lodged insurance claim with insurer. The event
does not impact the Company''s ability to continue as
a going concern. Management has implemented a
contingency plan to maintain supply chain stability.
Production requirements will be met through third-
party procurement until the facility or other alternate
production arrangement.

SUBSIDIARY, JOINT VENTURE AND ASSOCIATE
COMPANY

As at March 31,2026 the Company did not have any Subsidiary,
Joint Venture or Associate Company.

Subsequent to the end of the reporting period, the Company
acquired a 31% equity interest in each of Zayo Cables Private
Limited and Zayo Energy Private Limited, thereby increasing
its equity interest from 19% to 50% in each of the aforesaid
companies. Consequently, both companies became Associate
Companies of the Company.

DEPOSIT

Your Company has not accepted any deposits within the
meaning of Section 73 of the Companies Act, 2013 read with
the Companies (Acceptance of Deposits) Rules, 2014.

PARTICULARS OF LOANS, GUARANTEES OR
INVESTMENTS UNDER SECTION 186 OF THE
COMPANIES ACT, 2013

During the financial year under review, the Company has not
granted any loans, provided any guarantees or securities,
or made any investments covered under Section 186 of the
Companies Act, 2013. Accordingly, no transactions requiring
disclosure under Section 186 were undertaken by the Company
during the year under review.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS
WITH RELATED PARTIES

In accordance with the requirements of the Companies Act,
2013 ("Act") and the applicable provisions of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations,
2015 ("Listing Regulations"), the Company has formulated a
Policy on Materiality of Related Party Transactions and
Dealing with Related Party Transactions, which is intended
to ensure appropriate reporting, approval and disclosure
processes in respect of transactions with Related Parties. The
Policy is available on the Company''s website athttps://www.
utlsolarfuiivama.com/investor-relations/disclosures-under-46/.

During the financial year ended 31 March 2026, all contracts,
arrangements and transactions entered into by the Company
with its Related Parties were in the ordinary course of
business and on an arm''s length basis.

Further, there were no contracts or arrangements entered into
by the Company during the financial year under review which
fall within the purview of Section 188 of the Act and require
disclosure in Form AOC-2 pursuant to Section 134(3)(h) of the
Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014.
Accordingly, Form AOC-2 is not applicable to the Company for
the financial year ended 31 March 2026.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE
REGULATORS OR COURTS OR TRIBUNALS IMPACTING
GOING CONCERN STATUS OF THE COMPANY''s
OPERATIONS IN FUTURE

There were no significant and material orders passed by the
regulators, courts or tribunals impacting the going concern
status and the company''s operations in future during the
financial year ended March 31,2026.

ANNUAL RETURN

In terms of Section 92(3) read with Section 1 34(3)(a) of the
Companies Act, 2013 read with Rule 12 of the Companies
(Management and Administration) Rules, 2014 the draft Annual
Return of the Company in Form MGT-7 for the financial year
ended on as on March 31, 2026 is available on the website of
the Company athttps://www.utlsolarfuiiyama.com/investor-
relations/disclosures-under-46/.

EMPLOYEES STOCK OPTION PLAN (ESOP)

With a view to attract, reward and retain talented and key
employees in the competitive environment and encourage
them to align individual performance with Company objectives,
the Company grants share based benefits to eligible employees
under the Employees Stock Option Schemes.The Company
has instituted the "Employee Stock Option Plan 2023" ("ESOP
2023"), which was approved in the Annual General Meeting
of the Company by the shareholders on 30^th September 2023
and subsequently amended by the Board and approved by the
Members on March 06, 2026.

ESOP 2023 provides for the grant of upto 62,50,000 (Sixty-Two
Lakhs Fifty Thousand Only) Employee Stock Options of ?1/-
each, in one or more tranches, to the eligible employees of
the Company. The Nomination and Remuneration Committee
(NRC) is responsible for administering and overseeing the
implementation of this scheme. The NRC is entrusted with the
responsibility of evaluating, approving, and administering the
grant of options in accordance with the scheme''s objectives.
The valuation and allocation of options are determined and
approved by the NRC.

Disclosure as per SEBI (Share based employee benefits and
Sweat Equity) Regulations, 2021 and the Companies Act, 2013
relating to employees Stock Option Scheme is available on the
Company''s website and may be accessed at the linkhttps://
www.utlsolarfuiiyama.com/investor-relations/disclosures-
under-46/esop-scheme/ .

The details of ESOP options granted and exercised have
also been disclosed in Note 47 to the Financial Statements
respectively forming an integral part of this Integrated
Annual Report.

In terms of Regulation 13 of SEBI ESOP Regulations 2021, the
Certificate from M/s. Raghav Bansal & Associates, would be
placed before the shareholders at the forthcoming AGM.

CORPORATE GOVERNANCE REPORT

The Corporate Governance philosophy of the Company is
driven by the interest of stakeholders, focus on fairness,
transparency and business needs of the organisation. The
Company continues to be compliant with the requirements
of Corporate Governance as stipulated in Listing Regulations.
In terms of Regulation 34 read with Schedule V of Listing
Regulations, the Corporate Governance Report including a
certificate from M/s Raghav Bansal & Associates, a Practicing
Company Secretary, regarding compliance of the conditions of
Corporate Governance has been provided in this Annual Report

BUSINESS RESPONSIBILITY & SUSTAINABILITY
REPORT

The Business Responsibility and Sustainability Report (''BRSR'')
highlight the Company''s adherence to the principles outlined
in the ''National Guidelines on Responsible Business Conduct''
The Company actively promotes its suppliers, partners, and
other stakeholders in adopting these principles.

Pursuant to Regulation 34(2)(f) of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, the Business
Responsibility and Sustainability Report ("BRSR"), outlining the
Company''s initiatives and performance from an environmental,
social and governance (ESG) perspective, forms integral part
of this Annual Report and is also available on the Company''s
website athttps://www.utlsolarfuiiyama.com/investor-
relations/

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulation 34 of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, the Management
Discussion and Analysis Report for the financial year 2025-26
forms an integral part of this Annual Report and is presented in
a separate section thereof.

CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPTION AND FOREIGN EXCHANGE EARNING
AND OUTGO

Information as required under Section 134(3)(m) on
conservation of energy, Technology Absorption and Foreign
exchange Earning and outgo stipulated under section 134(3)
(m) of the Companies Act 2013 read with rule 8(3) of the
Companies (Accounts) Rules 2014 are given in Annexure A.

INTERNAL FINANCIAL CONTROL

The Company recognizes internal controls as a key element of
good corporate governance, facilitating effective management
through a structured framework of checks, balances, and
accountability. Considering the nature, scale, and complexity
of its business operations, the Company has established a
comprehensive internal control system designed to safeguard
assets, ensure operational efficiency, promote compliance with
applicable laws and regulations, and support reliable financial
reporting.

The internal control framework is supported by a clearly
defined organizational structure, well-documented policies
and procedures, an established Financial Delegation of
Authority, information technology governance policies, and a
comprehensive Code of Conduct. These controls are reinforced
through appropriate management information and monitoring
mechanisms to ensure adherence to approved processes and
regulatory requirements.

Pursuant to Section 134(5)(e) of the Companies Act, 2013, the
Company has instituted adequate internal financial controls
commensurate with its business requirements and has taken
measures to ensure their effective operation. The adequacy and
effectiveness of these controls are periodically reviewed by the
management as well as the independent Internal Auditors.

The Internal Auditors conduct regular audits to evaluate the
effectiveness of internal controls, compliance with applicable
laws, regulations, and internal policies, and to identify
opportunities for process improvement and risk mitigation.
Significant audit observations, recommendations, and the
status of corrective actions are periodically placed before the
Audit Committee and senior management for review and
oversight.

M/s. S N Dhawan & CO LLP, the Statutory Auditors, have audited
the financial statements presented in this Integrated Annual
Report. As part of their audit, they have affirmed the adequacy
and operating effectiveness of the Company''s internal controls
over financial reporting, in accordance with the requirements
of Section 143 of the Act, as of March 31,2026.

Further details on the Company''s internal control mechanisms
and their adequacy are provided in the Management Discussion
and Analysis section of this Integrated Annual Report.

DIRECTOR''S RESPONSIBILITY STATEMENT

Pursuant to The Directors'' Responsibility Statement referred to
in clause (c) of sub-section (3) of Section 134 of the Companies
Act, 2013, the Directors, to the best of their knowledge and
belief, confirm that for the financial year ended March 31,2026:

(a) In the preparation of the annual accounts, the applicable
accounting standards had been followed along with
proper explanation relating to material departures;

(b) the directors have selected such accounting policies and
applied them consistently and made judgments and
estimates that are reasonable and prudent so as to give a
true and fair view of the state of affairs of the Company for
the financial year ended March 31,2026 and of the profit
of the company for the period;

(c) the directors have taken proper and sufficient care for
the maintenance of adequate accounting records in
accordance with the provisions of this Act for safeguarding
the assets of the company and for preventing and
detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts for
the financial year ended March 31, 2026 on a going
concern basis;

(e) the Directors had laid down internal financial controls
to be followed by the company and that such internal
financial controls are adequate and were operating
effectively; and

(f) the directors have devised proper systems to ensure
compliance with the provisions of all applicable laws
and that such systems were adequate and operating
effectively.

AUDITORS AND AUDITORS'' REPORT

Statutory Auditors and their report

In terms of Section 139 of the Companies Act, 2013, read with
the Rules made thereunder, M/s. S.N. Dhawan & Co LLP,
Chartered Accountants (Firm Registration No. 000050N/
N500045), was appointed as Statutory Auditors of the Company
at the 7^th Annual General Meeting ("AGM") , for a term of five
years to hold office till the conclusion of 12^th AGM to be held
in year 2029-30, at such remuneration, including out of pocket
expenses and other expenses, as may be mutually agreed by
and between the Board of Directors and the Statutory Auditors.

The Statutory Auditors have confirmed that they are not
disqualified from being appointed or continuing as the
Statutory Auditors of the Company under the provisions of

the Companies Act, 2013 and the rules made thereunder and
are eligible to hold office as Statutory Auditors of the Company.

The Statutory Auditor''s Report on the financial statements
for the financial year under review forms part of this Annual
Report. The report is unmodified and does not contain
any qualification, reservation, adverse remark, or
disclaimer. Accordingly, no explanation or comment by the
Board is required in respect of any qualification, reservation,
adverse remark or disclaimer under Section 134(3)(f) of the
Companies Act, 2013.

Secretarial Auditors and their report

In terms of Section 204 of the Companies Act, 2013, read with
the Rules made there under, M/s. Raghav Bansal & Associates,
Company Secretaries, was appointed as the Secretarial Auditors
of the Company to conduct the Secretarial Audit for the financial
year ended March 31,2026.

The Secretarial Audit Report in Form MR-3, as received from
M/s. Raghav Bansal & Associates, Company Secretaries, for the
financial year ended 31 March 2026, is annexed to this Report
as Annexure B and forms an integral part of this Annual Report.
The Board''s comments/explanations on the observations made
by the Secretarial Auditors in their Report are provided in
Annexure C.

Pursuant to the amended provisions of Regulation 24A of the
Listing Regulations and Section 204 of the Act read with Rule 9 of
the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Audit Committee and the Board of
Directors have approved and recommended the appointment
of M/s Raghav Bansal & Associates, Company Secretaries (Firm
Registration Number : S2015DE314700), a peer reviewed firm
of Company Secretaries in practice, as the Secretarial Auditors
of the Company for a period of 5 (five) consecutive years from
FY 2026-27 to FY 2030-31 subject to approval of shareholders
of the Company at the forthcoming AGM. Brief details on the
proposed appointment of secretarial auditors are separately
disclosed in Notice of forthcoming AGM.

Internal Auditors and their report

In terms of Section 138 of the Companies Act, 2013 read with
rules made thereunder, Mr. Rohit Garg was appointed as an
Internal Auditors of the Company to conduct the Internal Audit
for Financial Year 2025-26.

The Internal Audit Report for the financial year 2025-26, as
received from the Internal Auditor, was duly considered and
reviewed by the Management and the Audit Committee of the
Company.

No fraud has been reported by the Internal Auditor during
the financial year under review. Accordingly, no disclosure is
required under Section 134(3)(ca) of the Companies Act, 2013.

The Board has re-appointed Mr. Rohit Garg as the Internal
Auditors of the Company for the financial year 2026-27.

Cost Auditors and their report

In terms of Section 148 of the Companies Act, 2013 read with
the Companies (Cost Records and Audit) Rules, 2014, the Board
of Directors had appointed M/s. Chandra Bhushan Kumar
& Co, Cost Accountants (Firm Registration. No 002885), as

Cost Auditors of the Company for conducting the audit of cost
records of the Company for the Financial Year 2025-26.

The Cost Audit Report for Financial Year 2025-26 does not
contain any qualification, reservation, disclaimer or adverse
remark, therefore no disclosure is required under Section 134(3)
(ca) of the Act.

The Company has maintained the cost records as specified by
the Central Government under Section 148(1) of the Companies
Act, 2013, as applicable to the Company.

Further, the Board of Directors has re-appointed M/s. Chandra
Bhushan Kumar & Co., Cost Accountants (Firm Registration
No. 002885), as the Cost Auditors of the Company for the
financial year 2026-27, subject to the ratification of their
remuneration by the Members at the ensuing Annual General
Meeting, in accordance with Section 148(3) of the Companies

Act, 2013 read with Rule 14 of the Companies (Audit and
Auditors) Rules, 2014. Rule 14 specifically provides for Audit
Committee recommendation, Board approval and subsequent
shareholder ratification of the Cost Auditor''s remuneration
where an Audit Committee is required.

DETAILS OF FRAUDS REPORTED BY AUDITORS
UNDER SECTION 143(12) OF THE ACT

During the year under review, the Statutory Auditors have
not reported any instance of fraud committed against the
Company by its officers or employees under Section 143(12) of
the Companies Act, 2013.

Secretarial Standards

During the year under review, your Company has adhered
with all the applicable provisions of Secretarial Standards with
respect to meetings of the Board of Directors (SS-1) and General
meetings (SS-2) issued by the Institute of Company Secretaries
of India as prescribed under the provisions of Section 118(10)
of the Act.

LISTING ON STOCK EXCHANGES

The Company''s shares are listed on BSE Limited ("BSE") and the
National Stock Exchange of India Limited ("NSE").

BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

As on March 31,2026, your Company''s Board had six Directors, including Executive and Non-Executive Directors and one woman
independent director. The Details of Directors and Key Managerial Personnel (KMPs) as on March 31,2026 are as follows:

Change in Directorship and KMP

During the period under review, Mr. Rakesh Kumar tendered
his resignation from the position of Company Secretary of the
Company due to personal reasons and Ms Mayuri Gupta was
appointed as Company Secretary and KMP of the Company
w.e.f. May 02, 2025.

Except as stated above there was no change in the Directors
or Key Managerial Personnel of the Company, during the year
under review.

Brief profile, nature of expertise, details of directorship held
in other companies, Chairmanships/membership of Board
Committees, shareholding in the Company held by the
Directors and relationship with Directors inter-se and other
details as stipulated under Regulation 36(3) of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015
(''Listing Regulations'') as amended read with the provisions of
the Secretarial Standard on General Meetings issued by the
Institute of Company Secretaries of India (''SS-2'') relating to the
Director proposed to be re-appointed at the 9^th AGM is annexed
to the notice convening the said AGM.

Director(s) liable to retire by rotation as per Section 152 of
the Act

In terms of the provisions of Section 152 of the Act read with
rules made there under and Articles of Association of the
Company and provisions of the Act, Mr. Sunil Kumar (DIN:
09824459) Director of the Company, is liable to retire by
rotation at the forthcoming AGM and being eligible, offer
himself for re-appointment. The Board of Directors recommend
his re-appointment for consideration by the members of the
Company at the forthcoming AGM.

COMMITTEES OF THE BOARD

The composition, terms of reference, powers, roles and
responsibilities of the various Committees of the Board, along
with the details of their meetings and attendance during the
financial year, are provided in the Corporate Governance
Report, which forms part of this Annual Report.

ANNUAL EVALUATION OF PERFORMANCE OF BOARD,
ITS COMMITTEES AND INDIVIDUAL DIRECTORS

The annual performance evaluation process of the Board of
Directors, individual Directors (including the Chairperson) and
its Committees for the Financial Year ended March 31,2026 was
conducted internally in accordance with the provisions of the
Act. This evaluation was based on a structured questionnaire
which cover various aspects of the Board''s functioning such as
adequacy of the composition of the Board and its Committees,
participation at meetings, Member''s strengths and contribution,
execution and performance of specific duties, obligations and
governance and feedback from each Director.

The Nomination and Remuneration Committee also reviewed
the performance of individual directors on the basis of criteria
such as the contribution of the individual director to the Board
and committee meetings like preparedness on the issues to
be discussed, meaningful and constructive contribution and
inputs in meetings, etc. and the Board as a whole. The outcome
of the performance evaluation was presented to the Board of
Directors of the Company and key outcomes; actionable areas
are discussed and acted upon.

The Independent Directors at meeting held on 07.11.2025
review the performance of Non-Independent Directors and the
Board as a whole, Chairperson of the Company after taking into
account the views of Executive Directors and Non-Executive
Directors, and assessed the quality, quantity and timeliness of
flow of information between the Company management and
the Board that is necessary for the Board to effectively and
reasonably perform their duties.

Performance evaluation of independent directors was done
by the entire Board, excluding the independent director

being evaluated A detailed disclosure on the framework of
Board Evaluation including outcome and action plan has been
provided in the Report on Corporate Governance, which forms
a part of this Annual Report.

COMPANY''S POLICY RELATING TO DIRECTORS''
APPOINTMENT AND PAYMENT OF REMUNERATION

Pursuant to the provisions of Section 178 of the Act and
Regulation 19(4) read with Part D of Schedule II of Securities
and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015 ("Listing Regulations"), the
Board of Directors has adopted, on the recommendation of
the Nomination and Remuneration Committee, a Nomination
and Remuneration Policy which, inter alia, sets out the
criteria for appointment, qualifications, positive attributes
and independence of Directors, as well as the framework for
remuneration of Directors, Key Managerial Personnel, Senior
Management Personnel including the recommendation
of remuneration payable to Key Managerial Personnel and
Senior Management Personnel and the related disclosure
requirements.

The policy is accessible at the website of the Company''s
athttps://www.utlsolarfuiivama.com/investor-relations/
governance/.

INFORMATION REGARDING EMPLOYEES AND
RELATED DISCLOSURES

The statement of Disclosure of Remuneration under Section
197 of the Act and Rule 5(1) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014
(''Rules''), is annexed as Annexure D and forms an integral part
of this Board''s Report. The statement containing particulars of
employees, as required under Section 197 of the Act, read with
Rule 5(2) and Rule 5(3) of the Rules, is provided in a separate
annexure forming part of this Board''s Report. However, in
terms of the provisions of Section 136 of the Act, the Integrated
Annual Report is being sent to the members of the Company,
excluding the said annexure. The said annexure is available
for inspection by the members at the Registered Office of the
Company during working hours of the Company i.e. on Monday
- Friday on 11:00 a.m. to 5:00 p.m. (IST).

Any member interested in obtaining a copy of the said annexure
may write to the Company Secretary of the Company or send
an email at[email protected]

Declaration by an Independent Director(S)

Pursuant to Section 149(7) of the Act and Regulation 25(8)
of SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the Company has received declarations from
all Independent Directors confirming the following -

a. that they meet the criteria of independence as specified in
Section 149(6) of the Act, as amended from time to time
and Regulation 16(1)(b) of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015.

In terms of Regulation 25(8) of the Listing Regulations,
the Independent Directors have confirmed that they are
not aware of any circumstance or situation which exists
or may be reasonably anticipated that could impair or
impact their ability to discharge their duties with an
objective independent judgement and without any
external influence and that they are independent of the
Management

b. they have complied with the Code for Independent
Directors prescribed under Schedule IV to the Act; and

c. they have registered themselves with the Independent
Director''s Databank maintained by the Indian Institute of
Corporate Affairs.

d. they are not debarred from holding the office of director
under any SEBI order or any other such authority.

DISCLOSURE UNDER SECTION 197(14) OF ACT

The Managing Directors of the Company are not receiving any
remuneration or commission from the holding Company or
subsidiary company.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In terms of Section 135 of the Companies Act, 2013 read with the
Companies (Corporate Social Responsibility Policy) Rules, 2014,
as duly amended, provisions of Corporate Social Responsibility
are applicable on the Company and accordingly, the Company
has a CSR Policy in line with Schedule VII of the Act.

The Company is committed towards increasing its Corporate
Social Responsibility (CSR) impact with an aim of playing a
bigger role in sustainable development of our society. The
Board of Directors in consultation with the CSR Committee
of the Company oversee and monitor the CSR initiatives and
give preference to the local area and areas around it where it
operates for spending the amount earmarked for Corporate
Social Responsibility activities.

The CSR Committee also formulates and recommends to
the Board of the Company, CSR Annual Action Plan (AAP) in
pursuance to its Policy. The CSR Policy & AAP of the Company
is available on the Company''s website athttps://www.
utlsolarfuiivama.com/investor-relations/governance/.

The CSR liability for the financial year ended March 31, 2026
was ? 2,04,80,340/- and the Company had spent and utilised an
amount of C 2,04,80,340/- on CSR Activities specified in Schedule
VII of the Act. The Annual Report on our CSR activities for the

financial year ended March 31, 2026 is set out in Annexure E
to this Report.

RISK MANAGEMENT POLICY

In compliance with the provisions of the Companies Act,
2013 and Regulation 21 of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, the Company has
constituted a Risk Management Committee (RMC) of the Board.
The Committee is entrusted with the responsibility of assisting
the Board in overseeing the Company''s risk management
framework and ensuring that robust systems are in place for
identifying, assessing, and mitigating various risks. The risk
management framework is effectively implemented across the
organization at multiple levels. The Risk Management Policy,
formulated after comprehensive assessment of internal and
external risk factors—including financial, operational, sectoral,
cyber security, regulatory compliance, and business continuity
risks—provides a structured and proactive approach to
managing risk. The RMC periodically reviews the Company''s risk
exposure and ensures that appropriate mitigation strategies
are in place. The policy on Risk Management Policy is placed on
the Company''s website athttps://www.utlsolarfuiiyama.com/
investor-relations/disclosures-under-46/.

DISCLOSURE ON ESTABLISHMENT OF A VIGIL
MECHANISM (WHISTLE BLOWING)

Pursuant to Section 177(9) of the Companies Act, 2013 read
with rules made thereunder, and Regulation 22 of SEBI Listing
Regulations the Company has a Vigil Mechanism/Whistle Blower
Policy which has been communicated within the organization
to eliminate and help prevent malpractices, to investigate and
resolve complaints, to take appropriate action to safeguard the
interests of the Company, and to ensure that the whistleblower
is protected. The details of vigil mechanism as provided in the
Whistle Blower Policy has been disclosed in the Corporate
Governance Report forming an integral part of this Board''s
Report. This said Policy is accessible on the Company''s website
athttps://www.utlsolarfuiiyama.com/investor-relations/
governance/.

PROCEEDINGS UNDER INSOLVENCY AND
BANKRUPTCY CODE, 2016

During the year under review, there were no proceedings that
were filed by the Company or against the Company, which
are pending under the Insolvency and Bankruptcy Code,
2016, as amended, before National Company Law Tribunal or
other Courts.

PREVENTION OF SEXUAL HARASSMENT AT
WORKPLACE

The Company has in place a Policy on Prevention, Prohibition
& Redressal against Sexual Harassment of Women (POSH) at
Workplace as per the requirements of ''The Sexual Harassment

of Women at Workplace (Prevention, Prohibition and Redressal)
Act, 2013'' This policy provides for prevention and redressal
of complaints of sexual harassment and incidental matters
and is accessible on the Company''s website athttps://www.
utlsolarfuiiyama.com/investor-relations/governance/.

The Company is committed to provide a safe, secure and
inclusive work environment for all its employees and
maintains a zero-tolerance approach towards any form of
sexual harassment at the workplace. In compliance with the
provisions of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 ("POSH Act"),
the Company has implemented a robust framework for the
prevention, prohibition and redressal of sexual harassment. To
promote awareness and foster a respectful workplace culture,
the Company conducts regular sensitisation and training
programmes across its locations, ensuring that employees are
informed of their rights, responsibilities and the mechanisms
available for addressing grievances.

As per the said Policy, an Internal Complaint Committee (ICC)
had been constituted to redress the complaints received
regarding sexual harassment under the POSH Act. The following
is the summary of sexual harassment complaints received and
disposed-off by the ICC during the year under review:

COMPLIANCE TO THE PROVISIONS RELATING TO THE
MATERNITY BENEFITS ACT, 1961

The Company has complied with the applicable provisions of
the Maternity Benefit Act, 1961, and has extended maternity
leave and other statutory benefits to eligible women employees
in accordance with the requirements of the Act. The Company
remains committed to fostering a safe, healthy, and inclusive
workplace and ensuring that all benefits and protections available
to women employees under the applicable laws are duly provided.

ONE-TIME SETTLEMENT WITH ANY BANK OR
FINANCIAL INSTITUTION

During the year under review, there was no instance of any one¬
time settlement with any bank or financial institution.

CAUTIONARY STATEMENT

The information in the Annual report describing the Company''s
objectives and projections may constitute ''forward looking
statements'' within the meaning of applicable rules, laws and
regulations. Although, the actual results may differ.

ACKNOWLEDGEMENT

The Board of Directors would like to express its heartfelt
appreciation for the outstanding contributions of the
Company''s employees. Their steadfast commitment, relentless
efforts, and alignment with the Company''s objectives have
played a crucial role in driving the Company''s growth and
success. The accomplishments of the Company are a reflection
of the skill, dedication, teamwork, and unity demonstrated by
employees across all levels.

The Board also extends its sincere thanks to our esteemed
customers, dealers, distributors, franchise partners, vendors,
and other business associates for their unwavering trust and
continued partnership. We are equally grateful to the local
communities around our plant locations for their cooperation
and goodwill, which have significantly supported our ongoing
development and operations.

As we move forward, we remain confident in the continued
support of all our stakeholders in achieving our long-term
vision and strategic goals.

The Board further acknowledges with gratitude the consistent
support and cooperation extended by the Government of India,
State Governments, regulatory bodies, financial institutions,
and our valued shareholders, whose encouragement has been
vital to the Company''s sustained progress.

For and on behalf of Board of Directors
Fujiyama Power Systems Limited

(Formerly Fujiyama Power Systems Private Limited)
Yogesh Dua Pawan Kumar Garg

CEO & Joint Managing Director Chairperson & Joint Managing Director

DIN:00315251 DIN:08005220

Place: Delhi

Dated: 24^th August, 2026

Your Directors have pleasure in presenting the 13th Annual Report of the Company
together with the Audited Statement of Accounts for the year ended 31st March 2025.

On a consolidated basis, your Company’s revenue increased to INR 5982.59mn for the current
year as against INR 4833.97mn in the previous year. Your Company’s net profit is INR 132.75mn
for the current year as against the net loss of INR 593.76mn in the previous year. On a
standalone basis, your Company’s revenue increased to INR 1740.91mn for the current year as
against INR 1186.21mn in the previous year. Your Company’s net profit is INR 35.06mn in the
current year as against the net loss of INR 523.34mn in the previous year.

*Net revenue- refer note 21 of standalone financial statements and note 22 of consolidated financial statements

Business performance is highlighted in CEO’s message, which is shared separately.

1.2 Amount, if any, which the Board proposes to carry to any reserves

Your Company does not propose to transfer any amount to the reserves for financial year 2024-25.

1.3 Dividend

Your Company does not propose to declare any dividend for financial year 2024-25.

^1.4 Major events occurred during the year

-a State of company’s affair

Your company has not engaged in any significant developments or material affairs during
the financial year 2024-25

"b. Change in nature of business

Your Company has not changed nature of business during the financial year 2024-25 under
review.

-c. Material changes and commitments, if any, affecting the financial position of
the Company, having occurred since the end of the Year and till the date of the Report

In the opinion of the Board, no item, transaction or event of a material and unusual nature
has arisen in the interval between the end of the financial year and the date of this report,
which would affect substantially the results, or the operations of your Company for the
financial year in respect of which this report is made.

1.5 Details of revision of financial statement or the Report

Your Company has not revised its financial statement or the Report in respect of any of the
three preceding financial years either voluntarily or pursuant to the order of a judicial
authority.

People Practice

In FY 2024-25, the People Practice function at Capillary Technologies continued to evolve
as a strategic corporate enabler, working collaboratively across all business units to drive
organizational excellence, employee engagement, and operational effectiveness. Aligned
with our long-term business objectives, the function played a pivotal role in enhancing
people-centric practices, streamlining policies, building leadership capability, and
nurturing a culture of continuous development.

One of the key strategic priorities during the year was the streamlining of global human
resource (“HR”) policies and processes, ensuring consistency and compliance across
geographies. These policies underwent a rigorous audit to align with statutory
requirements and industry best practices. As part of this effort, we successfully conducted
a comprehensive HR Audit across India, the United States, and the Europe.

We also transformed the mid-year review process to emphasize development, introducing
the "on track / off track" framework. This simplified approach-enabled through our
partnership with the xto10x platform-served as a strategic checkpoint to celebrate
progress and identify areas for growth.

Significant strides were made in HR tech integration to enable seamless data flows and
operational efficiency. Our core HRMS platform, Darwinbox, was successfully integrated
with:

• Netsuite (Finance tool) for payroll and cost allocation

• OnGrid for automated background verification and

• Sense for a streamlined onboarding experience

Our HR Shared Services continued to ensure smooth delivery of critical services including
payroll administration, benefits management, employee data governance, and resolution
of employee queries, all while maintaining service quality benchmarks and compliance.

As part of our ongoing investment in talent and leadership, the year saw the expansion of
coaching and development programs:

• Personalized coaching for top talent and JEDI/senior managers, helping leaders align
personal growth with organizational priorities.

• First-time manager development program, designed to empower new managers with
essential leadership capabilities in communication, delegation, performance
management, and conflict resolution.

• Transition coaching for offshore delivery center (“ODC”) managers in mysore, following
the inauguration of our mysore offshore delivery center, ensured leadership continuity
and cultural integration.

p p

Capillary Academy, our dedicated Learning & Development (L&D) wing, aimed at fostering a
culture of continuous learning, capability building, and career growth. It continues to serve as
the central hub for learning and development through personalized and scalable programs,
enabling both product and functional capability building across the organization. In FY
2024-2025, the team delivered impactful learning outcomes with 45 courses (including 30
product certifications), 5,500 completions, 800 active learners, and 50 hours of expert-led
training each quarter - spanning Product Training Days, new joiner bootcamps, custom
workshops, and client/partner-specific trainings.

Key Highlights-
Building Team Capabilities

Client-Readiness Workshops: Custom product workshops conducted for US-CS teams,
aligned with client-specific use cases to build demo and client readiness

Onboarding Bootcamps: Trained all new joiners at the Mysore office through structured
product and process bootcamps for seamless onboarding
^ Role-Based Learning Paths: Launched for PSV, CS, Design, Product, and HR teams to
streamline onboarding

^ Hands-On Product Learning: Introduced assignment-based and use case-led product
bootcamps for deeper engagement

^ Manager Dashboards: Rolled out improved dashboards for tracking completion of
mandatory learning modules

Content & Engagement

^ Podcast-Style Certifications: Transformed baseline certifications into engaging
audio-based formats to enhance self-paced learning

^ Capillary Compass: Curated a new HR onboarding module with leader snippets &
departmental walkthroughs to help new joiners understand Capillary’s journey, values, and
growth- now a part of India orientation.

^ Rewards Enablement: Launched an interactive walkthrough and baseline certification to
enhance understanding and adoption of the new Rewards module

^ Microlearning Assets: Created 25 bite-sized product videos to support just-in-time learning

^ LMS Upgrade: Launched a new Learning Management System with better usability and
tracking, driving higher engagement

^ CapConnect Launch: Introduced a community-based platform within the Academy portal
for peer-driven knowledge sharing and collaboration.

Gamified Learning: Continued motivation through badges, leaderboards, Academy
Champions, and contributor rewards - further encouraging a vibrant learning culture
across teams

Curated a new HR onboarding module with leader snippets & departmental walkthroughs to
help new joiners understand Capillary’s journey, values, and growth- now a part of India
orientation. These efforts have contributed to faster onboarding, stronger product readiness,
and improved client delivery - reinforcing continuous learning and strengthening capabilities
across Capillary.

The New Hire Onboarding Program was revamped to provide a structured, engaging, and
high-impact assimilation experience for new joiners. The integration of digital tools and
curated experiences significantly improved onboarding satisfaction scores.

To foster deeper engagement, we launched a host of initiatives during our Foundation Week
celebrations, which included:

YourDost mental well-being sessions

Football matches

o

Photography contests
The FitCap Challenge

Capillary Appreciation Week and Gratitude Wall initiatives

These activities reflected our commitment to building an inclusive, appreciative, and
high-performing culture.

We embedded a holistic wellness approach into our people strategy, addressing physical,
mental, emotional, and social well-being. Key initiatives included:

₀ Launch of FitCap, a monthly health and wellness newsletter

Annual health check-ups, nutrition workshops, and monthly fitness challenges
₀ Football and badminton tournaments
₀ Onsite yoga, Zumba, and fitness classes

Stress management seminars and mindfulness sessions
₀ Gut Health Session
₀ Capillary Premiere League

S pecia l wellness highlights includ ed:

• The three-day Inner Peace Workshop conducted in Bangalore (Nov 2024)

• The Warrior Quest Challenge, part of our physical wellness initiative

• Capillary X CULT Onsite Session, encouraging employees to engage with their
fitness benefits through CultFit

To foster a culture of open communication, we organized regular HR Open Houses and All
Hands Meetings, offering employees a platform to understand organizational updates,
policy changes, and voice feedback. This helped us reinforce trust and involve employees in
the company’s decision-making process.

In our pursuit of continuous improvement, we actively partnered with business leaders to
analyze and act on eNPS (Employee Net Promoter Score) results. Through regular pulse
connects, targeted interventions, and feedback loops, we addressed key themes,
strengthening engagement and employee experience.

The People Practice function continues to play a pivotal role in shaping Capillary’s
organizational culture, enabling business growth, and delivering employee-centric
outcomes. By embedding strategic intent into every initiative and fostering cross-functional
collaboration, we remain committed to building a resilient, high-performing, and
people-first organization.

3.1 Issue of shares or other convertible securities

During the financial year under review, following are the changes:

a. Change in the authorized, issued, subscribed and paid-up share capital
(i) Authorised Capital

The Authorised share capital of the Company is as given below:

(ii) Issued , Subscribed and paid up share capital.

As on date of this report, the issued, subscribed and paid-up share capital of the Company has
changed from INR. 14,64,68,706/- (Rupees Fourteen Crore Sixty Four Lakh Sixty Eight
Thousand Seven Hundred and Six Only) to INR. 14,66,58,276/- (Rupees Fourteen Crore Sixty
Six Lakh Fifty Eight Thousand Two Hundred and Seventy Six Only) details of which are given
below:

Equity Share capital

^b. Reclassification or Subdivision of the authorised share capital.

During the financial year under review, the Company has not undertaken any
reclassification or sub-division of the authorised capital in terms of Companies Act 2013.

^c. Reduction of share capital or buy back of shares

The Company has not reduced nor bought back any shares.

^d. Change in capital structure resulting from restructuring

There is no change in the capital structure resulting from restructuring.

e. Change in voting rights
There is no change in the voting rights.

3.2 Issue of equity shares with differential rights and sweat equity shares

During the financial year under review, the Company has neither issued equity shares with
differential rights nor issued sweat equity shares in terms of Companies Act, 2013.

^3.3 Details of employee stock options

The Company had adopted “Capillary Employees Stock Option Scheme- 2021” (hereinafter
referred to as the “ESOP 2021”/ “Scheme”) along with its amendments from time to time. Under
the scheme, your Company grants share-based benefits to the eligible employees by granting
stock options (“Options”), with a view to attract and retain talent in and within the Company
(including subsidiaries and holding company) encourage employees to strive to perform better,
and ultimately incentivize such employees who exhibit traits appreciated by the Company.

Disclosure as required under Rule 12 of Companies (Share Capital and Debentures)
Rules, 2014 as on March 31, 2025:

Additional disclosure: -During the year under review the company has purchased rights on 94,785 vested options
from active and inactive employees of the Company.

3.4 Shares held in trust for the benefit of employees where the voting rights are not
exercised directly by the employees

During the financial year under review, the Company has not held any shared in trust for the
benefit of employees where the voting rights are not exercised directly by the employees.

During the financial year in review, the company has not issued and allotted any
debentures, warrants, bonds or any non-convertible securities.

During the financial year under review, your Company has neither obtained nor revised any
credit rating in respect of securities.

During the financial year under review, disclosure pursuant to Investor Education and
Protection Fund under sub-section (2) of section 125 of the Act and the IEPF (Accounting,
Audit, Transfer and Refund) Rules, 2016 are not applicable to your Company.

Bk

. |

6.1 Directors and Key Managerial Personnel

As on the date of this report, the Company has Six (6) directors consisting of four (4)
Independent directors and two (2) Executive directors. The composition of the Board is in
conformity with Section 149 and 152 of the Act.

None of the Directors on the Board:

holds directorships in more than ten public companies;

^ serves as Director or as independent directors in more than seven listed entities; and
^ who are the Executive Directors serves as independent directors in more than three listed
entities.

^ are related to each other.

Necessary disclosures regarding Committee positions in other public companies as on
March 31, 2025 have been made by the Directors.

The Key Managerial Personnel’s of the Company as on March 31, 2025 are:

None of the directors of the Company are disqualified pursuant to the provisions of Section
164 of Companies Act, 2013 or debarred or disqualified from being appointed or continuing
as directors of companies by the Securities and Exchange Board of India or Ministry of
Corporate Affairs or any such statutory authority.

mb. Appointment / Resignation from Board of Directors

Pursuant to the resignation of Mr. Sameer Garde, Mr. Aneesh Reddy Boddu, who was
serving as the Managing Director of the Company, has been appointed as the Chief
Executive Officer (CEO) and designated as a Key Managerial Personnel (KMP) of the
Company with effect from May 14, 2024. Consequently, Mr. Aneesh Reddy Boddu has been
relieved from his responsibilities as Vice Chairman of the Company with effect from the
same date.

Based on the recommendation of the Nomination and Remuneration Committee, the Board
of Directors at its meeting held on August 27, 2024, and with the approval of the
shareholders at the Annual General Meeting held on September 27, 2024, re-appointed Mr.
Aneesh Reddy Boddu as the Managing Director & Chief Executive Officer (MD & CEO) and
Mr. Anant Choubey as the Executive Director, Chief Operating Officer (COO) and Chief
Financial Officer (CFO) of the Company for a further term of three years, effective from
November 24, 2024 to November 23, 2027.

Similarly, based on the recommendation of the Nomination and Remuneration Committee,
the Board at its meeting held on August 27, 2024, and with the approval of shareholders at
the AGM held on September 27, 2024, re-appointed Mr. Farid Lalji Kazani, Mrs. Neelam
Dhawan, Mr. Venkat R Tadanki, and Mrs. Yamini Preethi Natti as Independent Directors of
the Company for a further term of five years, effective from December 10, 2024 to
December 09, 2029.

c. Directors retiring by rotation

In accordance with the provisions of Section 152 of the Companies Act, 2013 read with
Section 149 of the said Act, at least 2/3rd of the total number of Directors, excluding
Independent Directors, shall be liable to retire by rotation and out of the Directors liable to
retire by rotation, at least 1/3rd of the Directors shall retire by rotation at every Annual
General Meeting.

In view of the above, Mr. Anant Choubey (DIN-06536413), who has been longest in office
since his appointment, who is liable to retire by rotation and being eligible, offers himself
for re-appointment, a resolution seeking shareholders’ approval for his re-appointment
forms part of the notice. The Board recommends his re-appointment.

The Company has received necessary declaration from each of the Independent Directors,
under Section 149(7) of the Companies Act, 2013, that he / she meets the criteria of
Independence laid down in Section 149(6) of the Companies Act, 2013 and Independent
Directors have complied with the Code for Independent Directors prescribed in Schedule IV
to the Act. Further, the Independent Directors have included their names in the data bank
of Independent Directors maintained with the Indian Institute of Corporate Affairs in terms
of Section 150 of the Act read with Rule 6 of the Companies (Appointment and
Qualification of Directors) Rules, 2014.

Further, Independent Directors have also confirmed that they are not aware of any
circumstance or situation, which exist or may be reasonably anticipated, that could impair
or impact their ability to discharge their duties with an objective independent judgment
and without any external influence and that they are independent of the management.

The Independent Directors attend a Familiarization / Orientation Program on being
inducted into the Board. Further, various other programmes are conducted for the benefit
of Independent Directors to provide periodical updates on regulatory front, product,
engineering, sales and marketing developments and any other significant matters of
importance. The details of the Familiarization programmes provided by the Company is
available on the Company’s Website at https://www.capillarytech.com/investors.

^ Further the Company issues a formal letter of appointment to the Independent Directors,
outlining their role, function, duties and responsibilities, the format of which is available on
the Company’s Website at https://www.capillarytech.com/investors.

During the year under review and as on date of this report

Except for payment of professional fee to M/s. Amir Advisory Services LLP (where Mr. Farid
Lalji Kazani- Independent Director is a partner) for availing advisory services, the Company
did not have any pecuniary relationship or transactions with any of its Directors, other than
payment of sitting fees to Independent Directors and reimbursement of expenses incurred
by them for the purpose of attending meetings of the Board / Committees of the Company.

The Advisory Agreement dated March 14, 2023 entered with M/s. Amir Advisory Services
LLP for providing advisory services on financial related matters had expired on March 01,
2024. The Audit Committee and Board of Directors approved the fresh advisory agreement
with M/s. Amir Advisory Services LLP dated May 27th, 2024 with same scope of work, for
which they shall be paid INR. 1 lakh per day spent on the assignment but not exceeding
total fee of INR. 9 lakh over a period of one year, which is lesser than 10% of total gross
turnover/ income of the said LLP for the year 2022-23. Mr. Farid Lalji Kazani (Independent
Director) and his daughter are partners of the said LLP.

In the opinion of the Board, all the independent directors appointed during the year are
persons of integrity, possesses relevant expertise and experience (including the
proficiency).

^ As required under Rule 6 of the Companies (Appointment and Qualification of Directors)
Rules, 2014, as on date of this report the details of Independent Directors, pertaining to
the online proficiency Self-Assessment test conducted by IICA are as below.

e. Women Director

In terms of the provisions of Section 149 of the Companies Act, 2013, your Company has
complied with the requirement of having at least one Independent Woman Director on the
Board of the Company. Mrs. Neelam Dhawan (00871445) Chairperson and Independent
Woman Director and Mrs. Yamini Preethi Natti (DIN 06533367) Independent Women
Director of the Company.

f. Changes in KMP

During the year under review and as on date of this report, following changes have taken
place in the composition of whole time key managerial personnel (‘KMP’) as per provision
of Section 203 of the Companies Act, 2013.

Mr. Sameer Garde resigned as Executive Director & CEO of the Company effective from
March 31, 2024.

^ Mr. Aneesh Reddy Boddu was appointed as Chief Executive officer & KMP of the Company
and was relieved from the duties of vice chairman.

6.2 Board Meetings

Nine Board Meetings were held during the year under review and the gap between two
meetings did not exceed one hundred and twenty days. The said meetings were held on:

^6.3 Committees and Corporate Governance

As on March 31, 2025, the Board had the following seven (7) committees

1. Audit Committee

2. Nomination & Remuneration Committee

3. Risk Management Committee

4. Stakeholders Relationship Committee

5. Corporate Social Responsibility Committee

6. Strategic and Business Development Committee and

7. Initial Public Offering (‘IPO’) Committee

The details of the composition, terms of references, and number of committee meetings
held during FY 2025 and the attendance of the committee members at each meeting are
given in the Report on Corporate Governance adopted voluntarily which forms a part of
the Annual Report.

*After 31st March, 2025, Strategic and Business Development Committee has been dissolved with effect from 20th April, 2025.

^6.4 Recommendations of Audit Committee

There have been no instances during the year where recommendations of the Audit
Committee were not accepted by the Board.

Composition of Audit committee

6.5 Company’s Policy on Directors’ appointment and remuneration

In compliance with Section 178 of the Companies Act 2013 , the Board has formulated a
‘Nomination and Remuneration Policy’ on Directors’ appointment and remuneration
including recommendation on remuneration of the key managerial personnel and other
employees and the criteria for determining qualifications, positive attributes and
independence of a director.

The Policy is available on the Investors section of the website of your Company at
https://www.capillarytech.com/policies/

6.6 Board Evaluation

The provisions of section 134 (p) of the Companies Act, 2013, with respect statement
indicating the manner in which formal annual evaluation of the Board, its Committees and
Individual Directors are not applicable to the Company, as the paid up share capital of the
Company is less than INR.25 crore as on March 31,2025. However, the Company on
voluntary basis has availed services from a third party i.e Valulead Consulting to undertake
the evaluation of the Board, its Committees and Individual Directors. In a separate meeting
of Independent Directors held on February 8, 2025, the performance of Non-Independent
Directors, the Chairperson of the Board and the Board as a whole was evaluated by the
Independent Directors.

6.7 Remuneration of Directors and Employees

^ Rule 5 (1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014 is not applicable to your Company as on March 31, 2025.

^ Statement containing details of employees as required in terms of Section 197 of the Act
read with Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, is available for inspection at the Registered Office of
the Company during working hours. A copy of the statement may be obtained by
shareholders by writing to the Company Secretary at the Registered & Corporate Office of
the Company or at [email protected].

6.8 Remuneration received by Managing/Whole time Director from holding or
subsidiary Company

No managing or whole-time director of the Company is in receipt of any
remunerations/commission from holding Company or Subsidiary Company.

6.9 Director’s responsibility Statement
Your Directors hereby confirm that:

a. in the preparation of the annual accounts, the applicable accounting standards had been
followed along with proper explanation relating to material departures;

b. the directors had selected such accounting policies and applied them consistently and
made judgments and estimates that are reasonable and prudent so as to give a true and
fair view of the state of affairs of the Company at the end of the financial year and of the
profit and loss of the Company for that period;

c. the directors had taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of this Act for safeguarding the
assets of the Company and for preventing and detecting fraud and other irregularities;

d. the directors had prepared the annual accounts on a going concern basis; and

e. the directors had devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems were adequate and operating effectively.

6.10 Internal financial control and its adequacy

Your Company has an adequate internal financial controls system over financial reporting
and such internal financial controls over financial reporting were operating effectively as at
March 31, 2025, based on the criteria for internal financial control over financial reporting
established by the Company. These responsibilities include the design, implementation and
maintenance of adequate internal financial controls that were operating effectively for
ensuring the orderly and efficient conduct of its business, including adherence to Company’s
policies, the safeguarding of its assets, the prevention and detection of frauds and errors,
the accuracy and completeness of the accounting records, and the timely preparation of
reliable financial information, as required under the Companies Act, 2013.

6.11 Quality Management System
Quality Policy

At Capillary, our mission is to consistently drive customer success by delivering excellence in
products and services. We are committed to continuous improvement across our systems
and processes, ensuring consistent return on investment for our clients.

Our quality strategy is rooted in customer feedback, evolving business needs, emerging
technologies, and performance analysis. We continually evaluate and adapt our practices to
ensure relevance and excellence in a rapidly changing market landscape.

Capillary''s quality framework is based on globally recognized standards and
industry-leading practices. We maintain ISO 27001:2022, PCI DSS 4.0 certifications, and are
annually assessed for SOC 2 Type 2 and SOC 1 Type 2 standards. These accreditations guide
our policies for SaaS product security, platform integrity, and corporate information
infrastructure protection.

Engineering Excellence & Product Quality

Engineering is at the core of our value creation. Our teams are structured for agility,
innovation, and resilience, enabling us to solve complex problems through modern
technology stacks and collaborative practices.

Core Engineering Practices

Agile and Scrum Methodologies:

Delivering high-quality features iteratively, with customer-centric alignment at every stage.
Continuous Integration & Delivery:

Automation-first pipelines ensure reliable deployments and faster time-to-market with
reduced human errors.

Cloud-Native Architecture:

Highly scalable and performant systems built on microservices and Kubernetes enable
rapid deployment, observability, and efficient resource use.

Test-Driven Development (TDD):

Unit and integration tests are embedded into our development process, ensuring fast
feedback cycles and high-quality releases.

Observability & Monitoring:

Every release includes application and infrastructure metrics, logs, and alerts to proactively
detect and resolve issues.

^ DevOps and Site Reliability Engineering (SRE):

We integrate reliability practices such as SLIs/SLOs, chaos testing, and automated failover
to ensure uptime and resilience.

Security by Design:

We embed secure coding practices, vulnerability scanning, and shift-left testing into the
SDLC, ensuring product security from day one.

Automation-Driven Quality Gates:

Automated functional test suites are executed across environments, including post-release
automation runs. Our sanity and smoke test suites run on production, and failures
immediately trigger alerts to ensure swift issue detection. This proactive approach enables
faster incident response, reinforces change management, and ensures release stability and
customer confidence.

Root Cause Analysis (RCA):

Focused effort on understanding the cause of failure, identifying gaps and areas of
improvement, while learning from mistakes, is part of the engineering culture. We resolve
systemic issues quickly and prevent recurrences by properly planning the permanent fix.

Process Governance & Continuous Improvement

We maintain a technology-led governance framework that emphasizes:

^ Standardization & Automation:

All critical decisions are backed by real-time dashboards and data-driven insights.
Feedback Loops:

Continuous internal and customer feedback mechanisms help evolve our products and
engineering processes dynamically.

Process Audits & Certifications:

Regular third-party audits ensure compliance with international standards and reinforce
our commitment to quality and security.

Customer Experience & NPS

Customer satisfaction is a board-level metric at Capillary. We run quarterly Net Promoter
Score (NPS) surveys across engineering, product, and customer success functions.

NPS results are used to:

^ Uncover improvement areas and prioritize them in OKRs.

^ Enable cross-functional efforts to resolve pain points.

^ Track trends and drive consistent enhancements in customer experience.

A systematic approach to analyzing feedback ensures our customers consistently see
value and trust in our solutions.

Delivery Methodology & Program Management

Our project delivery is anchored in Agile frameworks and mature program management
practices:

^ Project Management:

Provide transparency to internal and external stakeholders, including real-time tracking of
milestones and risk flags.

^ Customer-Centric Onboarding:

From kickoff, clients are integrated into the planning and execution phases to maximize
value realization from Day 1.

^ Change Management & Risk Mitigation:

Our playbooks include proactive change control and contingency planning to manage
uncertainties during implementations.

Our Quality Management System showcases:

^ Proven process maturity and product stability.

^ Robust security and compliance posture.

^ Scalable engineering and delivery models.

Strong customer satisfaction metrics and governance.

These form a critical part of our risk mitigation and operational excellence.

6.12 Frauds reported by auditor

During the financial year under review, pursuant to provisions of the Section 143(12) of the
Companies Act, 2013, the Auditor has not reported any incident of fraud to the Audit, Risk
management Committee.

Your Company has adopted Fraud Prevention Policy. The Policy is available on the Investor
Relations section of the website of your Company at
https://www.capillarytech.com/policies/

6.13 Adoption and review of policies

The details of the policies approved and adopted by the Board & Committees as required
under the Companies Act, 2013 are provided in Annexure I to the Board’s report.

6.14 Report on Corporate Governance

The Report on Corporate Governance of your Company adopted on voluntary basis forms
a part of the Annual Report.

As on March 31, 2025, our holding Company is Capillary Technologies International Pte. Ltd.
(‘CTIPL’) which holds 4,91,36,656 equity shares together with its nominee, representing
67.01% of the issued, subscribed and paid-up equity share capital of our Company.

As on March 31, 2025, our Company had 8(eight) wholly owned subsidiaries including 1
(one) direct and 7(seven) step down subsidiaries outside India. The Company is in the
process of closing its operations in China operated through Capillary Technologies
(Shanghai) Co., Ltd (step down subsidiary).

There are no associates or joint venture companies within the meaning of Section 2(6) of
the Companies Act, 2013 (“Act”).

Pursuant to the provisions of Section 129(3) of the Act, a statement containing the salient
features of financial statements of the Company’s subsidiaries in Form No. AOC-1 as
provided in Annexure II is attached to this report.

Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the
Company, and consolidated financial statements, are available on the Company’s website
at https://www.capillarytech.com/investors/annual-reports/ A copy of separate financial
statements of our subsidiaries shall be provided to any member of the company who asks
for it. All the documents stated under sub-section (1) of section 136 is available for
inspection at the Registered Office of the Company during working hours. Further,
members by writing to the Company Secretary at the Registered Office of the Company or
at [email protected] may obtain a copy of the same.

During the year, your Company has neither accepted nor renewed any deposits from public
within the meaning of Section 73 of the Companies Act, 2013 read with Companies (Acceptance
of Deposits) Rules, 2014.

¦ I

Pursuant to Section 186 of the Companies Act, 2013 disclosure on particulars relating to loans,
advances, guarantees and investments (wherever applicable) are provided as part of the
financial statements under note no. 05 & 08.

All related party transactions that were entered into during the financial year under review, were on
an arm’s length basis, and in the ordinary course of business and are in compliance with the
applicable provisions of the Act.

There were no materially significant related party transactions made by the Company during the
year that required shareholders’ approval under Companies Act 2013. All Related Party
Transactions are placed before the Audit Committee for approval. Further, prior omnibus approval
of the Audit Committee is obtained for the transactions which are repetitive in nature or when the
need for these transactions cannot be foreseen in advance.

Accordingly, the disclosure of the particulars of the related party transactions in form AOC -2 as
required under Section 134(3) (h) of the Act as provided in Annexure-III is attached to this report.

The details of related party transaction as per accounting standards is provided in Note 33 of Notes
to Financial Statements (Standalone).

I Bl

As per the provisions of Companies Act, 2013, a company meeting the specified criteria shall
spend at least 2% of its average net profits for three immediately preceeding financial years
towards CSR activities. Accordingly, the provision of CSR is not applicable to your company for
financial year 2024-25.

^OREIGNEXCHANGEEARNINGSANDOUTGO^^^^^^^^^^i

Company is part of Saas (‘software as a service’) industry and does not operate any
machineries, production facilities etc. As a part of corporate citizen, our Company’s
commitment is to improve community well-being through voluntary business practices and
contribution of corporate resources leading to sustainable growth. Also, our CSR policy is well
aligned to our business goals and meets or exceeds, the ethical, legal, commercial and public
expectations that society has of business. Some of the steps and practices followed by the
Company:

a. Conservation of Energy

b. Technology absorption

Bk

Your Company has a well-defined risk management framework in place. The Board of
Directors (“Board”) of the Company oversee the development of Risk Management Policy
and the establishment, implementation and monitoring of the Company’s risk management
system, in accordance with the policy. The Risk Management Committee reviews, assess and
formulate the risk management system and policy of our Company from time to time and
recommend for amendment or modification thereof, which shall include among others:

A framework for identification of internal and external risks specifically faced by our
Company, in particular including financial, operational, sectoral, sustainability (particularly,
environment, social and governance related risks), information, cyber security risks or any
other risk as may be determined by the committee;

^ Measures for risk mitigation including systems and processes for internal control of identified
risks; and

^ Business continuity plan;

The details of the Risk Management Committee are available on Company’s website. The Risk
Management Policy adopted by the Company is available at
https://www.capillarytech.com/policies/

Bk.

As our employees continue to work efficiently in a hybrid environment, we have remained
proactive in addressing the evolving cybersecurity threat landscape. In our efforts to
maintain a strong cybersecurity posture, our team has stayed informed about global
cybersecurity developments, ensuring higher compliance and ongoing security. We are
certified under the Information Security Management System (ISMS) Standard ISO
27001:2022 and PCI DSS 4.0. Additionally, we have completed the attestation for both SOC 2
and SOC 1 through an independent audit firm. Looking ahead, we are focused on achieving
HITRUST certification next year.

Throughout the year, we prioritized cybersecurity training, reskilling, and fostering a culture
of shared responsibility. We focused on encouraging a shift-left approach and empowering
our developer community with specialized courses and resource kits. These efforts were
aligned with our broader initiatives to enhance cybersecurity processes, technologies, and
overall security posture.

The Company has adopted a Vigil Mechanism Policy to provide a channel to the Directors and
employees to report genuine concerns about unethical behaviour, actual or suspected fraud
or violation of the standards, codes of conduct or policies adopted by the Company from
time to time. The Company is committed to adhering to the highest standards of ethical,
moral and legal conduct of business operations and in order to maintain these standards, the
Company encourages its employees who have genuine concerns about suspected
misconduct to come forward and express their concerns without fear of punishment or unfair
treatment. The mechanism provides for adequate safeguards against victimization of
Directors and employees to avail of the mechanism and also provide for direct access to the
Vigilance Officer. The Whistle Blower Policy adopted by the Company is available on Website
of the Company at https://www.capillarytech.com/policies/

. . Hfct

There are no significant material orders passed by the Regulators, Courts or Tribunals
impacting the going concern status of the Company and its operations in future.

M/s. Walker Chandiok & Co LLP, Chartered Accountants (Firm Registration no.
001076N/N500013), were appointed as the Statutory Auditors of the Company at the AGM
held on September 29, 2022 for a term of five consecutive years from the conclusion of 10th
Annual General Meeting (“AGM”) till the conclusion of 15th AGM of the Company to be held
in the year 2027 in accordance with the provisions of Section 139 of the Act.

The Report given by the Statutory Auditors on the standalone financial statements of the
Company and the consolidated financial statements of the Company for the financial year
ended March 31, 2025 forms part of this Annual Report.

M/s. BMP & Co, LLP, firm of practicing Company Secretaries (“Secretarial Auditors”), carried
out the secretarial audit for FY 2025 in compliance with the Act and the Rules made
thereunder, and other applicable regulations as amended and other laws specifically
applicable to your Company. The Secretarial Audit Report in form MR-3 for FY 2025 is
attached to this Report as Annexure - IV. The said Report does not contain any qualification,
reservation or adverse remark or disclaimer by the Secretarial Auditors.

. . . Bbt

Cost Auditor and Records

The provisions of appointment of Cost Auditor pursuant to section 146 read with Companies
(Cost Records and Audit) Rules, 2014 are not applicable to your Company during the financial
year 2024-25.

Maintenance of cost records as specified by the Central Government under sub-section (1) of
section 148 of the Companies Act, 2013, is not required by the Company and accordingly such
accounts and records are neither made and nor maintained.

Internal Audit

Protiviti India Member Private Limited (Independent Internal auditor) were appointed to
carry out Internal Audit to ensure the adequacy of the internal control system and adherence
to policies and practices. The audit committee regularly reviews the reports submitted by the
independent internal auditor and the adequacy and effectiveness of internal controls.

The Reports given by the Statutory Auditors on the standalone financial statements and the
consolidated financial statements of the Company for FY 2025 form part of the Annual
Report. The Reports do not contain any qualification, reservation or adverse remark or
disclaimer by the Statutory Auditors.

I

During the year under review, the Company has complied with all the applicable Secretarial
Standards issued by Institute of Company Secretaries of India (‘ICSI’). The Company has also
voluntarily adopted & complied with SS-4 (Report on Board of Directors).

^22CORPORATEINSOLVENCYRKOLUTIONPROCESSINITIAT^^^^^^^^^^^^^l

There are no proceedings initiated/pending against your Company under the Insolvency and
Bankruptcy Code, 2016 which materially impact the business of the Company.

During the year under review, there was no instances where Company has failed to complete
or implement any corporate action within the specified time limit.

Pursuant to the provisions of Section 134 (3) (a) of the Companies Act, 2013 read with the
rules made thereunder, the Annual Return (Form MGT-7) of the Company has been disclosed
on the website of the Company and Web Link thereto is:
https://www.capiNarytech.com/investors/regulation-46-of-sebi-lodr/

a. The consolidated financial statement is also being presented in addition to the
standalone financial statement of the Company.

b. The Company has not opted for any one time settlement from the Banks or Financial
Institutions.

^DISCLOSURES^

The Company has zero tolerance for sexual harassment at workplace and has adopted a
Policy on Prevention, Prohibition and Redressal of Sexual Harassment at workplace in line
with the provisions of the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 (POSH) and the rules made thereunder. The Policy aims
to provide protection to employees at workplace and prevent and redress complaints of
sexual harassment and for matters connected or incidental thereto, with the objective of
providing a safe working environment, where employees feel secure. The Company has not
received any complaints pertaining to sexual harassment during the financial year. Also, that
no cases were filed, disposed of and pending as on date of this report.

The Company has complied with provisions relating to the constitution of Internal Complaints
Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013.

Ik

In commitment to keep in line with the Green Initiatives and going beyond it, electronic copy
of the Notice of 13th Annual General Meeting of the Company including the Annual Report
for FY 2024-25 are being sent to all Members whose e-mail addresses are registered with the
Company / Depository Participant(s).

In terms of Environmental responsibility, the Company actively works to minimize its
ecological footprint by reducing carbon emissions, conserving energy and water, and
adopting environmentally friendly practices.

Capillary Technologies has a strong focus on sustainability. The company emphasizes
environmentally-friendly practices such as reducing energy footprint, encouraging staff to
engage in eco-friendly behaviors like using reusable utensils and avoiding plastic, planning
social initiatives like tree plantation drives and e-waste reduction, and having Environment
and Sustainability management plans in place.

^ We, as such, have a minimalistic carbon footprint/emission. Our workspace size is
maintained at a requirements level and we strive to ensure optimum usage of power across
our office spaces.

Our solutions are hosted on AWS and we inherit the sustainability measures and efforts
undertaken by AWS.

^ We work with Recykle, a waste management marketplace to ensure responsible e-waste
management practices and plan to be a 100% processed e-waste company by 2025.

^ This year, we tied up with another NGO on afforestation. Instead of trophies, we planted
trees for speakers through the NGO, SankalpTaru: https://sankalptaru.org/

^ Our employee and customer gifting solution is also sourced through local NGOs. Recently we
sourced handmade diaries from jute bags from a women’s group in uttarakhand
https://www.purkalstreeshakti.org/

We undertake many such initiatives with regional NGOs in every country.

^ We sourced tote bags from a women-run NGO called Pallaguttapalle Bags and gift hampers
from Thenga.

’ Ikk

Your Directors take this opportunity to thank the customers, shareholders, suppliers, bankers,
business partners/associates, financial institutions and Central and State Governments for
their consistent support and encouragement to the Company.

Your directors sincerely appreciate all employees of the Company and its Holding and
subsidiaries for their hard work and commitment.

On behalf of the Board of Directors
For Capillary Technologies India Limited

Sd/- Sd/-

Aneesh Reddy Boddu Anant Choubey

Managing Director and CEO Executive Director, CFO & COO

(DIN:02214511) (DIN: 06536413)

Date: 30/04/2025 Date: 30/04/2025

Place: Bangalore Place: Bangalore

Your Directors have pleasure in presenting the 12th Annual Report of the Company
together with the Audited Statement of Accounts for the year ended 31st March 2024.

1. Financial Performance

On a consolidated basis, your Company’s revenue increased to INR 5902.45mn for the
current year as against INR 3226.81mn in the previous year. Your Company’s net loss
decreased to INR 556.1mn for the current year as against INR 943.27mn in the previous
year. On a standalone basis, your Company’s revenue decreased to INR 1425.79mn for
the current year as against INR 1501.29mn in the previous year. Your Company’s net
loss decreased to INR 527.40 mn in the current year as against INR 905.56mn in the
previous year.

Business performance is highlighted in CEO’s message.

1.2 Amount, if any, which the Board proposes to carry to any reserves

Your Company does not propose to transfer any amount to the reserves for financial year 2023-24.

1.3 Dividend

Your Company does not propose to declare any dividend for financial year 2023-24.

1.4 Major events occurred during the year

a \ State of the Company’s affairs

• Acquisition of Brierley entities and asset purchase from Tenerity

During April, 2023, the Company through its wholly owned subsidiary i.e Capillary Pte. Ltd,
situated at Singapore has acquired entire stake in Capillary Technologies Europe Limited
(Formerly Known as Brierley Europe Limited) established under the laws of England and
wales and Capillary Brierley Inc (Formerly known as Brierley and Partners Inc) incorporated
under the laws of the state of Delaware.

The Company through its wholly owned subsidiary i.e Capillary Pte. Ltd, had purchased
assets from Tenerity, LLC-Delaware limited liability Company vide Asset purchase
agreement dated May 04, 2023.

b Change in the nature of business

Your Company has not commenced any new business or discontinued/ sold or disposed of
any of its existing businesses or hived off any segment or division during the financial year
2023-24 under review.

c Material changes and commitments, if any, affecting the financial position of the
Company, having occurred since the end of the Year and till the date of the Report

In the opinion of the Board, no item, transaction or event of a material and unusual nature
has arisen in the interval between the end of the financial year and the date of this report,
which would affect substantially the results, or the operations of your Company for the
financial year in respect of which this report is made.

1.5 Details of revision of financial statement or the Report

Your Company has not revised its financial statement or the Report in respect of any of the
three preceding financial years either voluntarily or pursuant to the order of a judicial
authority.

A i i ^

W w

People Practice

The People Practice is a strategic corporate function that operates collaboratively across all
business units and centers of excellence within an organization. The People Practice team
acts as a central hub for all HR-related activities and contributes to the overall success of
the organization.

During the year under review, one of the key initiatives undertaken was the integration of
talent acquisition tools to streamline and enhance our global recruitment process,
particularly focusing on the integration of talent acquisition processes between the US and
UK. This integration helped to ensure consistency, efficiency, and effectiveness in our
recruitment efforts across geographical boundaries. We implemented Skillate as our
primary ATS at Capillary, marking a significant milestone in our talent acquisition strategy.
By leveraging Skillate''s capabilities, we now aim to improve the quality of hires, reduce
time-to-fill, and enhance the overall candidate experience by ensuring a seamless transition
of new joiners into the organization through the “Capillary Launchpad” initiative.

This year we established Center of Excellence (‘COEs’) for HR Shared Services and Talent
Acquisition in India to manage activities across the globe. Key activities managed by the HR
Shared Services COE include but are not limited to payroll administration, benefits
administration, employee data management, and HR queries resolution. Similarly, the TA
COE was responsible for designing and implementing recruitment strategies, sourcing top
talent, managing candidate pipelines, and ensuring a seamless recruitment experience for
both candidates and hiring managers across geographies.

The establishment of COEs for HR Shared Services and Talent Acquisition yielded
significant outcomes by increasing agility and scalability to support organizational growth
and expansion into new markets while maintaining service excellence.

Capillary Academy has established itself as the go-to destination for all product and
department-related training programs, featuring a comprehensive array of modules and
enhanced reporting mechanisms over the past twelve months. Here are the key highlights for
FY year 2023-2024:

• Product bootcamps for new learners and specialized ILTs for partners conducted
every quarter.

• 20 product courses and certifications with use-case-centric content successfully
launched for self-paced learning.

• ''Product Training Days'' and expert/PM-led sessions organized every quarter for
knowledge transfer on new feature releases.

• Curated bite-sized learning videos for quick upskilling.

• Onboarding learning paths launched for CS, CS-Hub, and PSV teams.

• ''Train the Trainer'' programs implemented to develop more product experts and
trainers globally.

• Gamified learning through Academy leaderboards, Academy Champions, and
rewards.

As part of leadership development initiatives, JEDI and senior managers underwent
personalized one-on-one coaching sessions tailored to their specific development needs
and goals. These coaching sessions provided a space for leaders to reflect on their
leadership style, strengths, and areas for growth while ensuring alignment between
individual leadership development and organizational priorities. We conducted the First
Time Manager Training programs to meet the unique needs, assimilation process and
challenges faced by new leaders. These programs covered essential leadership skills, such as
communication, conflict resolution, delegation, and performance management, empowering
first-time managers to navigate their new roles with confidence and effectiveness.
Furthermore, individual coaching engagements were conducted for individuals at various
levels of the organization, including first-time managers.

Utilizing the “xto10x platform” to introduce a goal-setting framework aligned with the
organization''s strategic objectives last year, helped in integrating objective setting,
feedback, mid-year reviews and the focal appraisals on the system. This provided an
end-to-end visibility on our employees progression and performance for the course of
management.

In our continuous efforts to enhance employee satisfaction, the People Practice team
collaborated with HODs and managers to analyze and improve the eNPS Scores. Through
pulse connects and feedback mechanisms, we identified areas for improvement and
addressed concerns or challenges they may be facing.

"HR Open House" and "All Hands Meetings" were organized to facilitate transparency as
well as share pertinent information about organizational policies and changes involving
employees in decision-making processes.

In alignment with our goal of prioritizing employee well-being, we implemented a diverse
range of wellness programs throughout the year 2023-24.

These programs were designed to address various dimensions of well-being, including
physical, mental, emotional, and social aspects, fostering a holistic approach to employee
wellness. From Launching of monthly health newsletter - FitCap, Annual health checkup and
nutrition workshops, Monthly sports challenges, Organizing cricket and badminton
tournaments, On-site fitness classes (Yoga, Zumba etc.), to stress management seminars
and mindfulness sessions, our wellness programs catered to the diverse needs and interests
of our workforce, promoting a healthy work environment.

^ ¦¦ w

3.1 Issue of shares or other convertible securities

During the financial year under review, following are the changes:

a. change in the authorized, issued, subscribed and paid-up share capital;
(i) Authorised Capital:

The Authorised share capital of the Company is as given below:

(ii) Issued, subscribed and paid-up share capital

As on date of this report, the issued, subscribed and paid-up share capital of the Company
has changed from INR. 10,57,83,794/- (Rupees Ten Crore Fifty Seven Lakh Eighty Three
Thousand Seven Hundred and Ninety Four Only) to INR. 14,64,68,706/- (Rupees Fourteen
Crore Sixty Four Lakh Sixty Eight Thousand Seven Hundred and Six Only) details of which
are given below:

Equity Share Capital

b. Reclassification or sub-division of the authorised share capital;

During the financial year under review, the Company has not undertaken any
reclassification or sub-division of the authorised capital in terms of Companies Act 2013.

c. Reduction of share capital or buy back of shares;

The Company has not reduced nor bought back any shares.

d Change in the capital structure resulting from restructuring

There is no change in the capital structure resulting from restructuring.

e. Change in voting rights

There is no change in the voting rights.

3.2 Issue of equity shares with differential rights and Sweat Equity Shares-

During the financial year under review, the Company has neither issued equity shares with
differential rights nor issued sweat equity shares in terms of Companies Act 2013.

3.3 Details of employee stock options

Pursuant to approval of the members of your Company dated October 29, 2021, the
Company had adopted “Capillary Employees Stock Option Scheme- 2021” (hereinafter
referred to as the “ESOP 2021”/ “Scheme”) which was amended on November 30, 2021,
October 10, 2023, and March 24, 2023. Under the scheme, your Company grants
share-based benefits to the eligible employees by granting stock options (“Options”), with a
view to attract and retain talent in and within the Company, encourage employees to strive
to perform better, and ultimately incentivize such employees who exhibit traits appreciated
by the Company.

Disclosure as required under Rule 12 of Companies (Share Capital and Debentures)
Rules, 2014 as on March 31, 2024:

Additional disclosure: During the year under review your company bought back 3,88,628
vested options from active and inactive employees of the Company.

3.4 Shares held in trust for the benefit of employees where the voting rights are
not exercised directly by the employees-

During the financial year under review, the Company has not held any shares in trust for the
benefit of employees where the voting rights are not exercised directly by the employees.

^3.5 Issue of debentures, warrants, bonds or any non-convertible securities-

During the Financial year under review, the Company has allotted 2500 Non-Convertible
Debentures of face value of INR. 1,00,000/- each amounting to INR. 25,00,00,000/- (Twenty
Five Crore Only) dated April 03 & April 20, 2023 to InnoVen Capital India Fund acting through
its trustee, Vistra ITCL (India) Limited. The total issued and allotted Non-Convertible
Debentures as on date is 6,000 of INR. 1,00,000/- each amounting to INR. 60,00,00,000/-
(Sixty Crore Only).

Further during the financial year, the Company has issued and allotted 55,24,350 fully
compulsorily convertible debentures (‘CCDs’) on preferential offer through private
placement basis dated October 30, 2023 to Avataar II Co-Investment II Ltd.

A ^

^ ¦¦ w

During the financial year under review, your Company has neither obtained nor revised any credit
rating in respect of securities.

¦¦ ¦¦ n ¦ ¦¦

^ M HI w

During the financial year under review, disclosure pursuant to Investor Education and Protection
Fund under sub-section (2) of section 125 of the Act and the IEPF (Accounting, Audit, Transfer and
Refund) Rules, 2016 are not applicable to your Company.

6.1. Directors and Key Managerial Personnel

As on the date of this report, the Company has Six (6) directors consisting of four (4) Independent
directors and two (2) Executive directors. The composition of the Board is in conformity with
Section 149 and 152 of the Act.

None of the Directors on the Board:

• Holds directorships in more than ten public companies;

• Serves as Director or as independent directors in more than seven listed entities; and who are
the Executive Directors serves as independent directors in more than Three listed entities are
related to each other.

Necessary disclosures regarding Committee positions in other public companies as on March 31,
2024 have been made by the Directors.

The Key Managerial Personnel’s of the Company as on March 31, 2024 are:

*Refer to point b-bullet two below.

a. Disqualification of Directors

None of the directors of the Company are disqualified pursuant to the provisions of Section
164 of Companies Act, 2013 or debarred or disqualified from being appointed or
continuing as directors of companies by the Securities and Exchange Board of India or
Ministry of Corporate Affairs or any such statutory authority.

b. Appointment / Resignation from the Board of Directors

• Mr. Sameer Garde resigned as Executive Director & CEO of the Company effective from March
31, 2024.

• Mr. Aneesh Reddy Boddu was appointed as Chief Executive officer & KMP of the Company and
was relieved from the duties of vice chairman with effect from May 14, 2024.

• Based on the recommendation of the Nomination and Remuneration Committee, the Board at
its meeting held on August 27, 2024, re-appointed Mr. Aneesh Reddy Boddu as the MD & CEO
and Mr. Anant Choubey as the Executive Director & COO for a further period of three years
effective from November 24, 2024 to November 23, 2027, subject to approval of the
shareholders. The necessary resolutions for re-appointment of Mr. Aneesh & Mr. Anant forms
part of the notice. The profile and particulars of experience, attributes and skills that qualify Mr.
Aneesh & Mr. Anant for Board membership, are disclosed in the said Notice. The Board
recommends their re-appointment.

Based on the recommendation of the Nomination and Remuneration Committee, the Board
at its meeting held on August 27, 2024, re-appointed Mr. Farid Lalji Kazani, Mrs. Neelam
Dhawan, Mr. Venkat R Tadanki & Mrs. Yamini Preethi Natti as Independent Director for a
further period of five years effective from December 10, 2024 up to December 09, 2029,
subject to approval of the shareholders. The necessary resolutions for re-appointment
forms part of the notice. The profile and particulars of experience, attributes and skills that
qualify Mr. Farid Lalji Kazani, Mrs. Neelam Dhawan, Mr. Venkat R Tadanki & Mrs. Yamini
Preethi Natti for Board membership, are disclosed in the said Notice. The Board
recommends their re-appointment.

c. Directors retiring by rotation

In accordance with the provisions of Section 152 of the Companies Act, 2013 read with
Section 149 of the said Act, at least 2/3rd of the total number of Directors, excluding
Independent Directors, shall be liable to retire by rotation and out of the Directors liable to
retire by rotation, at least 1/3rd of the Directors shall retire by rotation at every Annual
General Meeting.

In view of the above, Mr. Aneesh Reddy Boddu (DIN- 02214511), who has been longest in
office since his appointment, who is liable to retire by rotation and being eligible, offers
himself for re-appointment, a resolution seeking shareholders’ approval for his re¬
appointment forms part of the notice. The Board recommends his re-appointment.

d. Declaration by Independent Director

The Company has received necessary declaration from each of the Independent Directors,
under Section 149(7) of the Companies Act, 2013, that he / she meets the criteria of

Independence laid down in Section 149(6) of the Companies Act, 2013 and Independent
Directors have complied with the Code for Independent Directors prescribed in Schedule IV to
the Act. Further, the Independent Directors have included their names in the data bank of
Independent Directors maintained with the Indian Institute of Corporate Affairs in terms of
Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of
Directors) Rules, 2014.

• Further, Independent Directors have also confirmed that they are not aware of any circumstance
or situation, which exist or may be reasonably anticipated, that could impair or impact their
ability to discharge their duties with an objective independent judgment and without any external
influence and that they are independent of the management.

• The Independent Directors attend a Familiarization / Orientation Program on being inducted
into the Board. Further, various other programmes are conducted for the benefit of Independent
Directors to provide periodical updates on regulatory front, product, engineering, sales and
marketing developments and any other significant matters of importance. The details of the
Familiarization programmes provided by the Company is available on the Company’s Website at
https://www.capillarytech.com/investors.

Further the Company issues a formal letter of appointment to the Independent Directors,
outlining their role, function, duties and responsibilities, the format of which is available on the
Company’s Website at https://www.capillarytech.com/investors.

• During the year under review and as on date of this report:

• Except for payment of professional fee to M/s. Amir Advisory Services LLP (where Mr. Farid Lalji
Kazani- Independent Director is a partner) for availing advisory services, the Company did not
have any pecuniary relationship or transactions with any of its Directors, other than payment of
remuneration / Incentive to the Executive Directors and payment of sitting fees to Independent
Directors and reimbursement of expenses incurred by them for the purpose of attending
meetings of the Board / Committees of the Company.

The Advisory Agreement dated March 14, 2023 entered with M/s. Amir Advisory Services LLP for
providing advisory services on financial related matters had expired on March 01, 2024. The
Audit Committee and Board of Directors approved the fresh advisory agreement with M/s. Amir
Advisory Services LLP with same scope of work, for which they shall be paid INR. 1 lakh per day
spent on the assignment but not exceeding total fee of INR. 9 lakh over a period of one year,
which is lesser than 10% of total gross turnover/ income of the said LLP for the year 2022-23. Mr.
Farid Lalji Kazani (Independent Director) and his daughter are partners of the said LLP.

• In the opinion of the Board, all the independent directors appointed during the year are persons
of integrity, possesses relevant expertise and experience (including the proficiency).

• As required under Rule 6 of the Companies (Appointment and Qualification of Directors)
Rules, 2014, as on date of this report the details of Independent Directors, pertaining to the
online proficiency Self-Assessment test conducted by IICA are as below:

|e. Woman Director

In terms of the provisions of Section 149 of the Companies Act, 2013, your Company has complied
with the requirement of having at least one Independent Woman Director on the Board of the
Company. Mrs. Neelam Dhawan (00871445) Chairperson and Independent Woman Director and
Mrs. Yamini Preethi Natti (DIN 06533367) Independent Women Director of the Company.

f Changes in KMP

During the year under review and as on date of this report, following changes have taken place in
the composition of whole time key managerial personnel (‘KMP’) as per provision of section 203
of the Companies Act 2013.

• Mr. Sameer Garde resigned as Executive Director & CEO of the Company effective
from March 31, 2024.

• Mr. Aneesh Reddy Boddu was appointed as Chief Executive officer & KMP of the Co mpany
and was relieved from the duties of vice chairman with effect from May 14, 2024.

6.2 Board Meetings

Nine Board Meetings were held during the year under review and the gap between two
meetings did not exceed one hundred and twenty days. The said meetings were held on:

6.3 Committees

As on March 31, 2024, the Board had the following seven (7) committees:

1. Audit Committee

2. Nomination & Remuneration Committee

3. Risk Management Committee

4. Stakeholders Relationship Committee

5. Corporate Social Responsibility Committee

6. Strategic and Business Development Committee and

7. Initial Public Offering (‘IPO’) Committee

The details of the composition, terms of references are available on the Company’s website.

6.4 Recommendations of Audit Committee

There have been no instances during the year where recommendations of the Audit Committee
were not accepted by the Board.

Composition of Audit Committee:

Further, there have been no instances during the year where recommendations of the
other Committees were not accepted by the Board.

6.5 Company’s Policy on Directors’ appointment and remuneration

In compliance with Section 178 of the Companies Act 2013 , the Board has formulated a
‘Nomination and Remuneration Policy’ on Directors’ appointment and remuneration
including recommendation on remuneration of the key managerial personnel and other
employees and the criteria for determining qualifications, positive attributes and
independence of a director.

The Policy is available on the Investors section of the website of your Company at
https://www.capillarytech.com/policies/

6.6 Board Evaluation

The provisions of section 134 (p) of the Companies Act, 2013, with respect statement
indicating the manner in which formal annual evaluation of the Board, its Committees and
Individual Directors are not applicable to the Company, as the paid up share capital of the
Company is less than INR.25 crore as on March 31, 2024.

However, the Company on voluntary basis has availed services from a third party platform
provider for Directors to undertake the evaluation of the Board, its Committees and
Individual Directors. In a separate meeting of Independent Directors held on March 06,
2024, the performance of Non Independent Directors, the Chairperson of the Board and
the Board as a whole was evaluated by the Independent Directors.

6.7 Remuneration of Directors and Employees

• Rule 5 (1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
is not applicable to your Company as on March 31, 2024.

• Statement containing details of employees as required in terms of Section 197 of the Act read
with Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, is available for inspection at the Registered Office of the Company
during working hours. A copy of the statement may be obtained by shareholders by writing to
the Company Secretary at the Registered & Corporate Office of the Company or at
[email protected].

6.8 Remuneration received by Managing/Whole time Director from holding or
subsidiary Company

No managing or whole-time director of the Company is in receipt of any remunerations/
commission from holding Company or Subsidiary Company.

j 6.9 Directors’ Responsibility Statement

Your Directors hereby confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been
followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair view of
the state of affairs of the Company at the end of the financial year and of the profit and loss of
the Company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of this Act for safeguarding the assets of
the Company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors had devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems were adequate and operating effectively.

^6.10 Internal Financial Controls and its adequacy

Your Company has an adequate internal financial controls system over financial reporting and
such internal financial controls over financial reporting were operating effectively as at March 31,
2024, based on the criteria for internal financial control over financial reporting established by
the Company. These responsibilities include the design, implementation and maintenance of
adequate internal financial controls that were operating effectively for ensuring the orderly and
efficient conduct of its business, including adherence to Company’s policies, the safeguarding of
its assets, the prevention and detection of frauds and errors, the accuracy and completeness of
the accounting records, and the timely preparation of reliable financial information, as required
under the Companies Act, 2013.

6.11 Frauds reported by the Auditor

During the financial year under review, pursuant to provisions of the Section 143(12) of the
Companies Act, 2013, the Auditor has not reported any incident of fraud to the Audit, Risk
management Committee. Your Company has adopted Fraud Prevention Policy. The Policy is
available on the Investor Relations section of the website of your Company at
https://www.capillarytech.com/policies/

|6.12 Adoption and review of policies

The details of the policies approved and adopted by the Board & Committees as
required under the Companies Act, 2013 are provided in Annexure I to the Board’s report.

^6.13 Report on Corporate Governance

The Report on Corporate Governance is not applicable to your Company.

As on March 31, 2024, our holding Company is Capillary Technologies International Pte Ltd
(‘CTIPL’) which holds 510,72,343 equity shares together with its nominee, representing
69.74% of the issued, subscribed and paid-up equity share capital of our Company

As on March 31, 2024, our Company had 9 (Nine) subsidiaries including 1 (one) direct and 8
(Eight) indirect outside India. The Company has closed its operations in Persuade Holding Inc
(Formerly Known as Persuade Holding LLC) (Indirect Subsidiary). The Company is in the
process of closing its operations in China operated through Capillary Technologies (Shanghai)
Co., Ltd (Indirect Subsidiary). There are no operations in both the companies.

There are no associates or joint venture companies within the meaning of Section 2(6) of the
Companies Act, 2013 (“Act”).

Pursuant to the provisions of Section 129(3) of the Act, a statement containing the salient
features of financial statements of the Company’s subsidiaries in Form No. AOC-1 as provided
in Annexure II is attached to this report.

Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the
Company, and consolidated financial statements, are available on the Company’s website at
https://www.capillarytech.com/investors/annual-reports/. A copy of separate audited
financial statements of our subsidiaries shall be provided to any member of the company who
asks for it. All the documents stated under sub-section (1) of section 136 is available for
inspection at the Registered Office of the Company during working hours. Further, members
by writing to the Company Secretary at the Registered Office of the Company or at
[email protected] may obtain a copy of the same.

During the year, your Company has neither accepted nor renewed any deposits from public
within the meaning of Section 73 of the Companies Act, 2013 read with Companies
(Acceptance of Deposits) Rules, 2014.

^1 W

Pursuant to Section 186 of the Companies Act, 2013 disclosure on particulars relating to Loans,
Advances, Guarantees and Investments (wherever applicable) are provided as part of the
financial statements under note 05 & 08.

d Hi HI w

All Related party transactions that were entered into during the financial year under review,
were on an arm’s length basis, and in the ordinary course of business and are in compliance
with the applicable provisions of the Act.

There were no materially significant Related Party Transactions made by the Company during
the year that required shareholders’ approval under Companies Act 2013. All Related Party
Transactions are placed before the Audit Committee for approval. Further, prior omnibus
approval of the Audit Committee is obtained for the transactions which are repetitive in nature
or when the need for these transactions cannot be foreseen in advance.

Accordingly, the disclosure of the particulars of the related party transactions in form AOC -2
as required under Section 134(3) (h) of the Act is not applicable.

The details of related party transaction as per accounting standards is provided in Note 32 of
Notes to Financial Statements (Standalone) and Note 32 of Notes to Financial Statements
(Consolidated).

As per the provisions of the Companies Act, 2013, a Company meeting the specified criteria
shall spend at least 2% of its average net profits for three immediately preceding financial
years towards CSR activities. Accordingly, the provisions of CSR is not applicable to your
Company for financial year 2023-24.

Company is part of Saas (‘software as a service’) industry and does not operate any
machineries, production facilities etc. As a part of corporate citizen, our Company’s commitment
is to improve community well-being through voluntary business practices and contribution of
corporate resources leading to sustainable growth. Also, our CSR policy is well aligned to our
business goals and meets or exceeds, the ethical, legal, commercial and public expectations
that society has of business. Some of the steps and practices followed by the Company:

(a) Conservation of energy

(c) Foreign exchange earnings and Outgo - (I_nr Millions)

^ H w

Your Company has a well-defined risk management framework in place. The Board of Directors
(“Board”) of the Company oversee the development of Risk Management Policy and the
establishment, implementation and monitoring of the Company’s risk management system, in
accordance with the policy. The Risk Management Committee reviews, assess and formulate the
risk management system and policy of our Company from time to time and recommend for
amendment or modification thereof, which shall include among others:

• A framework for identification of internal and external risks specifically faced by our
Company, in particular including financial, operational, sectoral, sustainability
(particularly, environment, social and governance related risks), information, cyber
security risks or any other risk as may be determined by the committee;

• Measures for risk mitigation including systems and processes for internal control of
identified risks; and

• Business continuity plan;

The details of the Risk Management Committee are available on Company’s website. The Risk
Management Policy adopted by the Company is available at
https://www.capillarytech.com/policies/

Cybersecurity

As our employees operate efficiently as a hybrid workforce, we continued to remain
vigilant on the evolving cybersecurity threat landscape. In our endeavour to maintain a
robust cybersecurity posture, the team has remained abreast of emerging cybersecurity
events globally, to achieve higher compliance and its continued sustenance. We are
certified against the Information Security Management System (ISMS) Standard ISO
27001:2022 & PCI DSS 4.0. Additionally, we have also been attested on SOC 2 by an
independent audit firm & will be undertaking SOC 1 too from this financial year.

During the year, our focus on cybersecurity personnel training, reskilling, and building a
security culture of collective onus, encouraging shift-left, enabling the developer
community with dedicated courses and resource kits went ahead as planned, together with
our overall initiatives on improving cybersecurity processes, technologies, and posture.

^ Hi w

The Company has adopted a Vigil Mechanism Policy to provide a channel to the Directors and
employees to report genuine concerns about unethical behavior, actual or suspected fraud or
violation of the standards, codes of conduct or policies adopted by the Company from time to
time. The Company is committed to adhering to the highest standards of ethical, moral and legal
conduct of business operations and in order to maintain these standards, the Company
encourages its employees who have genuine concerns about suspected misconduct to come
forward and express their concerns without fear of punishment or unfair treatment. The
mechanism provides for adequate safeguards against victimization of Directors and employees
to avail of the mechanism and also provide for direct access to the Vigilance Officer. The Whistle
Blower Policy adopted by the Company is available on Website of the Company at
https://www.capillarytech.com/policies/

™ Hi w

There are no significant material orders passed by the Regulators, Courts or Tribunals impacting
the going concern status of the Company and its operations in future.

I Hk.

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M/s. Walker Chandiok & Co LLP, Chartered Accountants (Firm Registration no.
001076N/N500013), were appointed as the Statutory Auditors of the Company at the AGM
held on September 29, 2022 for a term of five consecutive years from the conclusion of 10th
Annual General Meeting (“AGM”) till the conclusion of 15th AGM of the Company in
accordance with the provisions of Section 139 of the Act.

The Report given by the Statutory Auditors on the standalone financial statements of the
Company and the consolidated financial statements of the Company for the financial year
ended March 31, 2024 forms part of this Annual Report.

¦¦¦¦

^ w

M/s. BMP & Co, LLP, firm of practicing Company Secretaries (“Secretarial Auditors”), carried
out the secretarial audit for FY 2024 in compliance with the Act and the Rules made
thereunder, and other applicable regulations as amended and other laws specifically
applicable to your Company. The Secretarial Audit Report in form MR-3 for FY 2024 is attached
to this Report as Annexure - III. The said Report does not contain any qualification, reservation
or adverse remark or disclaimer by the Secretarial Auditors.

m mr

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Cost Auditor & records

a. The provisions of appointment of Cost Auditor pursuant to section 146 read with Companies
(Cost Records and Audit) Rules, 2014 are not applicable to your Company during the financial
year 2023-24.

Maintenance of cost records as specified by the Central Government under sub-section (1) of
section 148 of the Companies Act, 2013, is not required by the Company and accordingly such
accounts and records are neither made and nor maintained.

Internal Audit

b. Protiviti India Member Private Limited (independent internal auditor) were appointed to carry
out internal audit to ensure the adequacy of the internal control system and adherence to
policies and practices. The Audit Committee regularly reviews the reports submitted by the
independent internal auditor and the adequacy and effectiveness of internal controls.

^ H H H w

The Reports given by the Statutory Auditors on the standalone financial statements and the
consolidated financial statements of the Company for FY 2024 form part of the Annual Report.
The Reports do not contain any qualification, reservation or adverse remark or disclaimer by the
Statutory Auditors.

¦¦ hh ¦¦¦

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During the year under review, the Company has complied with all the applicable Secretarial
Standards issued by Institute of Company Secretaries of India (‘ICSI’). The Company has also
voluntarily adopted & complied with SS-4 (Report on Board of Directors).

There are no proceedings initiated/pending against your Company under the Insolvency and
Bankruptcy Code, 2016 which materially impact the business of the Company.

B HI HBI W

During the year under review, there was no instances where Company has failed to complete or
implement any corporate action within the specified time limit.

^¦j ¦¦

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Pursuant to the provisions of Section 134 (3) (a) of the Companies Act, 2013 read with the rules
made thereunder, the Annual Return (Form MGT-7) of the Company has been disclosed on the
website of the Company and Web Link thereto is:
https://www.capillarytech.com/investors/regulation-46-of-sebi-lodr/

(a) The consolidated financial statement is also being presented in addition to the standalone
financial statement of the Company.

(b) The Company has not opted for any one time settlement from the Banks or Financial
Institutions.

The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy
on Prevention, Prohibition and Redressal of Sexual Harassment at workplace in line with the
provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013 (POSH) and the rules made thereunder. The Policy aims to provide
protection to employees at workplace and prevent and redress complaints of sexual
harassment and for matters connected or incidental thereto, with the objective of providing a
safe working environment, where employees feel secure. The Company has not received any
complaints pertaining to sexual harassment during the financial year. Also, that no cases were
filed, disposed of and pending as on date of this report.

The Company has complied with provisions relating to the constitution of Internal Complaints
Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013.

In commitment to keep in line with the Green Initiatives and going beyond it, electronic copy of
the Notice of 12th Annual General Meeting of the Company including the Annual Report for FY
2023-24 are being sent to all Members of the Company / Depository Participant(s).

In terms of Environmental responsibility, the Company actively works to minimize its ecological
footprint by reducing carbon emissions, conserving energy and water, and adopting
environmentally friendly practices.

• Capillary Technologies has a strong focus on sustainability. The company emphasizes envi-
ronmentally-friendly practices such as reducing energy footprint, encouraging staff to
engage in eco-friendly behaviors like using reusable utensils and avoiding plastic, planning
social initiatives like tree plantation drives and e-waste reduction, and having Environment
and Sustainability management plans in place.

• We, as such, have a minimalistic carbon footprint/emission. Our workspace size is main¬
tained at a requirements level and we strive to ensure optimum usage of power across our
office spaces.

• Our solutions are hosted on AWS and we inherit the sustainability measures and efforts
undertaken by AWS

• We work with Recykle, a waste management marketplace to ensure responsible e-waste
management practices and plan to be a 100% processed e-waste company by 2025.

• This year, we tied up with another NGO on afforestation. Instead of trophies, we planted
trees for speakers through the NGO, SankalpTaru: https://sankalptaru.org/

• Our employee and customer gifting solution is also sourced through local NGOs. Recently
we sourced handmade diaries from and jute bags from a women’s group in uttarakhand
https://www.purkalstreeshakti.org/

• We undertake many such initiatives with regional NGOs in every country.

Hfl M ¦¦¦

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Your Directors take this opportunity to thank the customers, shareholders, suppliers, bankers,
business partners/associates, financial institutions, Central and State Governments for their
consistent support and encouragement to the Company.

Your directors sincerely appreciate all employees of the Company and its Holding and
subsidiaries for their hard work and commitment.

On behalf of the Board of Directors
For Capillary Technologies India Limited

^Sd/- Sd/-

Aneesh Reddy Boddu Anant Choubey

Managing Director and CEO Whole Time Director, CFO & COO

(DIN: 02214511) (DIN: 06536413)

Date: 14/06/2024 14/06/2024

Place: Bangalore P lace: Bangalore